Monthly Rant from my Shameless Newsletter

Home Ownership; Grab a Piece of Your Country

            As generation after generation that came before them, people continue to pour into the country, looking for the opportunity to make a better life.  Some of them come for the chance to live in a democracy, the right to choose leaders and participate in politics. But a far more motivating force driving most of the newcomers is their economic interests, the freedom to start their own businesses, to own their own home, and to do better for their children. 

            I believe that immigrants serve as a constant reminder to the American born that we are surrounded by opportunity. There are risks worth taking, businesses to start, college degrees to be had, and investments to be made. The future is bright for those with the strength to set fear aside.

            I recently had the opportunity to speak about real estate investment to a class of immigrants at the Winterstein Adult School.  Every student in this classroom of the world had owning a home as one of their primary goals.  These people work a job or three, spend their evenings in that classroom learning English, and I guarantee they don't go home to TiVo'd episodes of Maury Povich.  For these people, there are not enough hours in the day to accomplish all that they would like to accomplish for their families.  Like so many of the American immigrants that came before them (the Irish, the Italians, the Greeks to name a few), these people (the Russians, the Mexicans, the Laosians to name a few) are optimistic, and even aggressive, risk takers. And to this American born guy, they are a powerful inspiration. 

            One of the great things taking place in our current real estate market is that prices are coming down to levels that are inviting the first time home buyer and the first time investor back.  With interest rates still low, the opportunity for a chunk of the country, for a piece of the American Dream, is very real again. 

            I recently placed a young couple, who could never have afforded a home two years ago, in a 1,600 square foot home, with a pool on 1/3 acre for $237,000.  The home needed work, but hey, that is what Home Depot is for.  Is this real estate market bad for them?

            For $260,000, I recently sold a very clean listing with 3 bedrooms and 2 bathrooms near a park in a very solid Citrus Heights neighborhood to a very pregnant couple that would not have been able to afford last years prices. Is the real estate market bad for them?

            I helped yet another family make their move up after talking about it for two years. Two years ago they would have sold their home, a 3 bedroom 1 bath in a nice neighborhood for $400,000, and they would have paid around $525,000 for their replacement home.  Instead, they sold for $305,000 (to a first time home buyer, a Sheriff's deputy with a pregnant wife), and then they made an unbelievable deal on their purchase for $400,000.  They delayed their move, and now their taxes are going to be about $1,200 less annually than they would have been.  Is the real estate market bad for them?

            The real estate market has been very tough on some people lately.  People have lost their homes; bank stockholders have lost money; various contractors, pool builders, tile setters and roofers have lost business because home equity loans are harder to come by.  Many realtors and many people in the lending and title business have also gone belly up. 

            But as you take in the doom and gloom, remember that for many people, both foreign born and American born alike, the American Dream, and the countless opportunities that surround us, have never seemed more obvious.            

Rookie investor cheat sheet, no guarantees implied.