Tracking the Track Record
What the "Experts" say about Housing Prices.
"the prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline." -Time Magazine 1947
"Houses cost too much for the mass market. Today's average price is out of reach for two-thirds of all buyers" -Science Digest 1948 (average price at the time: $8,000)
"The goal of owning a home seems to be getting beyond the reach of more and more Americans." -Business Week 1969 (average price at the time: $28,000.)
"the era of easy profits in real estate may be drawing to a close." -Money Magazine 1981
"If you are looking to buy, be careful. Rising home values are not a sure thng anymore." -Miami Herald 1985
"Most economists agree...a home will become little more that a roof and a tax deduction, certainly not the lucrative investment it was..." -Money Magazine 1986
"Financial planners agree that houses will continue to be a poor investment." -Kiplinger's Persona Financial Magazine 1993
"A home is wehre the bad investment is." -San Francisco Examiner 1996
This information was in a handout that was passed around at our office meeting some time ago. It's interesting to see how history is cyclic in nature and how an understanding of that fact can, in the long run, make money.
I find it interesting to look back and see what the preconceived "market sentiment" was and despite the warnings of main-streem media,many, many people bought and sold property and made a profit. I know because I was one of those people. Seven years ago now my wife and I purchased our first home. We did not have dollar signs floating in our heads, we were not counting on equity accumulation, and we did not plan on selling when we did. Our motives were simple and straight forward, WE WERE TIRED OF MOWING SOMEONE ELSE'S LAWN! little did we know that a short six years later, we would walk away from the sale of our 1st home with more that $100k profit, and a new found respect for what real estate could do for us...
Fast forward to today. With the recent "maelstrom" affecting the lending industry and hundreds of mortgage company's pulling or rewriting loan packages, and the general public not knowing if these same company's will even be around tomorrow, people are calling me "crazy" to suggest "Now is the time to buy, if you want to make money." Here is the heart of why I think so; The lending industry has/is going through some radical changes, personally I have had several deals die, on the table, because a buyer was qualified when the purchase and sale was fully executed, however at the closing table, Mr.buyer was informed "sorry the underwriter doesn't have that particular loan package anymore...." Mortgage company's, industry wide, are starting to tighten-up and, unfortunately for some, that means the purchase of a home is now pushed out a few more years. However those same people are going to need a place to live, and that my friends is excellent news for a savvy investor. Vacancy rates, thanks to our mortgage company friends, should be low enough in the next several years to make many investors very happy. With a Saturation of inventory on the market finding a good bargain should not be difficult, and with good credit and 10-20% down, if not more, this is a market for investors to be grinning at. I know I am.
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