Home Ownership: Popular, But Not Good Investment...

General Inspection Topics General Inspection Discussion
21

Thankfully now some 3rd world nations are raising their standards of living!!! Our decline in standards of living will not fall to 3rd world levels but will drop!

These economically growing/improving 3rd world countries will probably not hit the levels of affluence we have had since post WW2 for many years…if not decades…and possibly not until world population growth stops and a new economic balance/ paradigm emerges that is not fueled/measured only by growth.

I made a decision about in 1972 whether to finish university in photography (a passion then) in Rochester, NY or living in the country, learning some basic skills like carpentry, electrical, etc. My choice was the country/basic skills as I saw a levelling downward of our countries’ standards of living coming due to international trade/education, Japan’s industrial rise to compete with us (an example of other countries to come), future environmental costs/restrictions…we couldn’t keep growing endlessly. To myself, photography was like a lot of the fine arts…only a few make it even in better times…so I stayed in the country, bought/renovated a 200 year old home, ran a retrofit/roofing/siding/ventilation, etc company.

The levelling that is beginning now (Lamborghini’s highest sales are now in China!!!) has taken longer to appear than I thought (history moves at its own pace…LOL) but appears to be here.

22

Best investments are made when you have wall of worries. The officials at the central banks, including Bernanke and Greenspan would have been billionaires if theoretical applications would address investment strategies as your observations points to, in both of your screeds from Canada.

The USA is the greatest nation on earth, problems have wavered many in the past, the business of America is business. We work harder and longer. We are not copycats, we are innovators and have bigger share of the Nobel prize winnings versus the nations with higher population. We are happy to drive “Chevys and Fords” because that’s us. Only the flash in the pan drive the “Lambs.”

Once more, if you deem RE investments is not your cup of tea then steer clear.

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Canada…who’s getting ahead??? Just out today:

Canada’s income gap widens, report says

[size=2]And we’re [/size]supposedly doing better than the US in the past few years!!!

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Your thoughts expressed in vertigo is omnipresent and you are entitled for chortling. It is indeed a proud moment. Best to you.

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Is this guy promoting class tension!!!

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
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Warren Buffett in a 2006 New York Times interview with Ben Stein.

26

NAR reporting fewer numbersof future home buyers in many states presently populated by aging Baby Boomers in a report published yesterday. As these homes become vacant and the demand for them decreases … will they increase or decrease in value?

27

Heard today that the banks are on the average 318 days behind in foreclosure procedings. Over 50% of college grads are moving back home with their parents, because they either cannot find a job, or cannot afford paying back their student loans, or both. These grads should be purchasing homes right out of college, because in the past, most grads where making good money. Now, they are lucky to get a job in fast food.

Future of home purchasing is bleek; just as our national economy. Lots of jobs that pay good, good economy. No jobs, jobs available that pay poorly, poor economy.

Seams that is what our current president wants.

28

I think that another incorrect assumption regarding real estate as an “investment” is that homes will somehow regain a value that they never really had to begin with. The bubble burst because the value was not really there in the first place.

Artificially increasing demand does not create an actual or lasting value. Unfortunately, some only needed the illusion of value to last long enough to close escrow.

In the meantime … the Baby Boomers will check out in style…

29

Morgan Stanley *Investment Firm *advise that owning a home is no longer a priority.

While other indicators rise and more people begin to invest … houses are not what they are interested in as values continue to decline.

The National Association of Realtors … famous for padding their numbers to make their statistics appear more positive than they are … show a decline in sales with an increase in cancelled contracts. They put their usually positive spin on it, but it hardly changes the perception that fewer people are choosing to buy during the time of the year when most homes are sold. This is pretty consistent with the Morgan Stanley analysis.

30

FHFA House Price Index Rises 0.4 Percent in May;
Second Consecutive Monthly Increase

http://www.fhfa.gov/webfiles/21746/HPI72111.pdf

31

Today, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for June 2011](http://realestateindustrynews.com/New%20Residential%20Sales%20(June%202011).pdf) showing a decrease of 1.0 percent from the month before, and an increase of 1.6 percent from a year ago. The seasonally-adjusted new home sales rate for June was 312,000 homes, down from 315,000 the month before and is a rate that if we finish 2011 at will make 2011 new home sales the lowest since the Commerce Department began keeping track of sales in 1963.

I suppose that when the summer ends and the kids are all back in school we will see more families in the market for new homes…:roll:

The supply is growing and the market is shrinking. Prices continue to drop… never to return to previous levels in our lifetimes.

Buy a house to live in. Don’t buy a house to “invest” in. It makes no sense.

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New Home Sales
Released on 7/26/2011 10:00:00 AM For Jun, 2011
Prior Consensus Consensus Range Actual
New Home Sales - Level - SAAR 319 K 321 K 309 K to 342 K 312 K
Highlights

Like last week’s report on existing home sales, today’s report on new home sales shows weakness but also surprising price strength. New home sales fell 1.0 percent in June to an annual rate of 312,000 vs expectations for 321,000. Upward revisions of 13,000 to May and April are an offset. Price strength is also an offset with the median up 5.8 percent to $235,200 and the average price up 1.8 percent to $269,000. Year-on-year rates jump into the positive ground in June, up plus 7.2 percent for the median price and up 4.8 percent for the average.

Supply eased a bit, to 6.3 months at June’s sales rate vs 6.4 and 6.5 in the two prior months. Total homes for sales are 164,000, down 3,000 in the month and a new low in nearly 50 years of data.

The housing sector is still scrapping along the bottom but June’s indications of price strength are positive. But these indications are tentative and will have to be confirmed in the coming reports before any conclusions can be drawn. Next data on the housing sector will be pending home sales on Thursday which will be very closely watched.

Market Consensus Before Announcement
New home sales fell 2.1 percent in May to a 319,000 annualized pace. Supply in terms of months dipped slightly to 6.2 months from 6.3 in April and from 6.9 in March. Supply in terms of the number of homes on the market, down 6,000 to 166,000, has never been lower in nearly 50 years of data. Low supply is a plus for prices which may be firming, up 2.6 percent to a median $222,600.

Definition
New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances. Why Investors Care

There is no question that lower interest rates boost home sales. Other factors also impact housing decisions, such as employment and income growth, and wealth stemming from stock market gains.

Data Source: Haver Analytics

2011 Release Schedule
Released On: 1/26 2/24 3/23 4/25 5/24 6/23 7/26 8/23 9/26 10/26 11/28 12/23
Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov