I recently ran across a website that held the position that renters win, buyers lose.
Not long ago I registered with stumbleupon.com. It's a great website where you can enter your interests, hit the stumble button and have a rotation of websites randomly come up based on the interests you pick. Of course, one of mine was real estate. Most are either informative or searches. Occasionally I come across one that is pure garbage.
Case in point, an article by a real estate "expert" telling readers that it is foolish to buy a home in this market. I suppose that could be debated depending on the local market conditions. Unfortunately that was not the case being made. Instead the writer used distorted statistics and some very twisted logic to say, for instance that there is no real tax advantage to owning vs. renting.
What about investment potential? I recently got a listing under contract for a young couple that is moving up. The home was purchased before the bubble. Using a little fuzzy math one could say that the seller lost about 60K from it's highest point. However, over the time of ownership the seller actually realized nearly 100K increase. This is the true representation of the benefits of long term investment in real estate. Not only did they see a good increase over time but by buying up in this market they got a great deal on the single family home they're moving up to. You don't have to be a rocket scientist to see that if they wait for the market to "come back" it will cost them. If they see a 10% increase in their 200K townhome they single family they bought at 335K will have increased the same 10%. The net result will be that they lost over 10K by waiting for the recovery.
I've also heard the argument from buyers that they are reluctant to borrow from their 401k's to purchase. Let's look at the performance of the 401k's vs. long term performance of real estate investment. Again, not rocket science.
So buyers beware...beware of real estate experts who are actually blogging's version of shock jocks. Those alarmist souls who don't buy or sell real estate but know all the answers. I would never advocate uninformed decisions in buying a home. Just the opposite. Get all the real facts and make an informed decision. When you do, I think you'll see that real estate is and has always been a great LONG TERM investment.
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