Too many potential real estate buyers pay way too much attention to short-term price changes. People are so worried that prices might drop a little and feel that maybe they should wait to buy something. So if you think you can predict the future, follow your beliefs! However, the reality is that the price, within reason, really should be a secondary matter in your search for a good property to purchase.
The main reason that price is less important is that individuals who want to increase their net wealth from real estate ownership, which is the goal of many buyers, should only be purchasing property that they will hold for a long time. The longer the better and a minimum of five years is probably the breakeven point to start building wealth. It is more likely than not that down the road, years after our economy has sprung back to life, real estate prices should be much higher than what people paid for properties in the next twelve months.
In 2020 or 2022, you won’t even remember the 2012-2013 price fluctuations. You’ll just be gloating to yourself how brilliant you were buying into the market ten years ago. Not only will you have purchased a great property at the most affordable pricing seen in decades, but you will probably have locked in an outrageously low interest rate on a mortgage that can be fixed for thirty years!
But, what if you buy and prices drop a little? Who cares! It won’t matter because you purchased a great property that you love for all the right reasons. You want to own real estate and any slight dip in the next year or two should be a wholly irrelevant short-term blip on the radar of a long term real estate holder.
In addition, in many areas right now, your monthly payment for ownership (including principal, interest, HOA fees if any, property taxes, and repairs) may be close to or less expensive than renting. That alone is an amazing turn of events in the history of personal residence ownership. This is more likely true for moderately priced properties. Even expensive, untouchable properties a few years ago are astonishingly affordable right now.
Now this doesn’t mean that it is the right time for just anyone to buy property. If you are not 100% sure you will own the property for a long time, it is probably smarter to stay a renter. If you move often, renting is probably a better option..
Additionally, this doesn’t mean that you can just buy any property to build wealth. You should probably avoid properties that need:
Significant rehabilitation work
Properties in HOAs where the association is in bad financial shape
Properties in areas where there are lots of foreclosures, high vacancy, near lots of buildable land
Areas where the local economy is in desperate shape.
Rarely are those wealth-building purchases. Go for the properties that are in better shape or in more stable areas with jobs and economic development.
For buyers who are too focused on price, are worried about short-term price drops and are holding off on buying, we long-term holding real estate buyers can only say thank you so much! Please keep obsessing over those monthly housing price reports and stay on the sidelines!
With less competition in the market, it makes the process of finding a great home to secure, and with those incredibly low interest rates, only sweeter for the rest of us who are charging forward to buy a property in the best buying environment in a generation!
-Leonard Baron, SDSU Professor & Author
T. C. Lewis & Co. Video Tours
Monday, March 5, 2012
Monday, February 6, 2012
Rent v Buy? What Should I Do?
In having both rental and sales divisions within T. C. Lewis & Co, we are posed the question all the time about whether someone should rent or buy. What are the pros and cons? What should I do? Why? When will this change? Well the answers aren't simple, and they often depend on each person's situation. But one thing is for sure, paying rent is getting more painful for renters across the country in the face of rising demand and tight supply. This isn't as prevalent in the Appalachian region yet, but it will happen....
Both the commercial and residential real estate markets are seeing increases, and more are expected in the months and years to come.
Office construction starts were at the lowest level since 1960, the oldest data available from McGraw-Hill Construction; and that means there will be less space available for companies looking to rent or expand their operations.
It’s also bad timing for people who have been spooked by, or pushed out of, the residential housing market and have decided to rent instead of buy. Home ownership in the United States is at historic lows, but at the same time rental prices are on the rise. Rent for a primary residence increased 2.5 percent in December, compared to the same month a year earlier, according to the Consumer Price Index. And Reis Inc.’s research shows that rents hit their highest level since 2007 last year, reaching $1,009 a month average rental price. At the same time, the company found, the vacancy rate dropped to 5.2 percent, from 6.6 percent last year.
“National vacancies continued to tighten sharply in the fourth quarter, bucking seasonal weakness typical of the colder months of the year,” said Victor Calanog, vice president of research & economic for Reis, in a report on the apartment sector. “In just two years after hitting all-time highs of 8 percent at the end of the tumultuous year that was 2009, vacancies have not just recovered, they have surpassed previous lows.”
Ironically, rising rents are actually making homeownership more attractive. One study by Trulia.com, a real estate research firm, found that “based on current market conditions, buying a home is cheaper than renting in 74 percent of major U.S. cities.”On the office rental side, this economic downturn has different from past ones, Calanog wrote, “Previous downturns for the office sector were complicated by overbuilding; this time around, the massive decline in aggregate demand at least isn’t weighed down by a supply glut.”
Unfortunately, that means the squeeze is on for renters from all walks of life as vacancy rates drop in the face of further shrinking of supply. Fewer places to rent means landlords have the upper hand when it comes to what they can ask. And that will probably be the case for the next few years, said Mark Stapp, professor of real estate practice at the W.P. Carey School of Business at Arizona State University.
On the residential side, there will be a push toward higher rents for the next two years, he explained, while commercial real estate rental prices may continue to increase for the next three to five years.
“The supply side is so constrained because no body has been building for years,” he said, because of the economy and the difficulties businesses and developers faced getting loans.
While lending is beginning to open up a bit now, it will take years before real estate firms are able to build enough space to meet the growing demand.
It’s good news for landlords, he added, who were forced to make concessions in recent years because of weakened demand, but it will be tough sledding for apartment and office dwellers who have to pay the escalating rents.
Is your rent bill going up?
Source: Eve Tahmincioglu
Both the commercial and residential real estate markets are seeing increases, and more are expected in the months and years to come.
Office construction starts were at the lowest level since 1960, the oldest data available from McGraw-Hill Construction; and that means there will be less space available for companies looking to rent or expand their operations.
It’s also bad timing for people who have been spooked by, or pushed out of, the residential housing market and have decided to rent instead of buy. Home ownership in the United States is at historic lows, but at the same time rental prices are on the rise. Rent for a primary residence increased 2.5 percent in December, compared to the same month a year earlier, according to the Consumer Price Index. And Reis Inc.’s research shows that rents hit their highest level since 2007 last year, reaching $1,009 a month average rental price. At the same time, the company found, the vacancy rate dropped to 5.2 percent, from 6.6 percent last year.
“National vacancies continued to tighten sharply in the fourth quarter, bucking seasonal weakness typical of the colder months of the year,” said Victor Calanog, vice president of research & economic for Reis, in a report on the apartment sector. “In just two years after hitting all-time highs of 8 percent at the end of the tumultuous year that was 2009, vacancies have not just recovered, they have surpassed previous lows.”
Ironically, rising rents are actually making homeownership more attractive. One study by Trulia.com, a real estate research firm, found that “based on current market conditions, buying a home is cheaper than renting in 74 percent of major U.S. cities.”On the office rental side, this economic downturn has different from past ones, Calanog wrote, “Previous downturns for the office sector were complicated by overbuilding; this time around, the massive decline in aggregate demand at least isn’t weighed down by a supply glut.”
Unfortunately, that means the squeeze is on for renters from all walks of life as vacancy rates drop in the face of further shrinking of supply. Fewer places to rent means landlords have the upper hand when it comes to what they can ask. And that will probably be the case for the next few years, said Mark Stapp, professor of real estate practice at the W.P. Carey School of Business at Arizona State University.
On the residential side, there will be a push toward higher rents for the next two years, he explained, while commercial real estate rental prices may continue to increase for the next three to five years.
“The supply side is so constrained because no body has been building for years,” he said, because of the economy and the difficulties businesses and developers faced getting loans.
While lending is beginning to open up a bit now, it will take years before real estate firms are able to build enough space to meet the growing demand.
It’s good news for landlords, he added, who were forced to make concessions in recent years because of weakened demand, but it will be tough sledding for apartment and office dwellers who have to pay the escalating rents.
Is your rent bill going up?
Source: Eve Tahmincioglu
Wednesday, January 4, 2012
Burying St. Joseph to Sell Your Property?
Cari Luna is Jewish by heritage and Buddhist by religion. She meditates regularly. Yet when she and her husband put their Brooklyn, N.Y., house on the market this year and offers kept falling through, Ms. Luna turned to an unlikely source for help: St. Joseph.
The Catholic saint has long been believed to help with home-related matters. And according to lore now spreading on the Internet and among desperate home-sellers, burying St. Joseph in the yard of a home for sale promises a prompt bid. After Ms. Luna and her husband held five open houses, even baking cookies for one of them, she ordered a St. Joseph "real estate kit" online and buried the three-inch white statue in her yard.
"I wasn't sure if it would be disrespectful for me, a Jewish Buddhist, to co-opt this saint for my real-estate purposes," says Ms. Luna, a writer. She figured, "Well, could it hurt?"
With the worst housing market in recent years, St. Joseph is enjoying a flurry of attention. Some vendors of religious supplies say St. Joseph statues are flying off the shelves as an increasing number of skeptics and non-Catholics look for some saintly intervention to help them sell their houses.
Some Realtors, too, swear by the practice. Ardell DellaLoggia, a Seattle-area Realtor, buried a statue beneath the "For Sale" sign on a property that she thought was overpriced. She didn't tell the owner until after it had sold. "He was an atheist," she explains. "But he thanked me."
Some Catholic clergy are uncomfortable with the St. Joseph's trend. Statues of St. Joseph sold online can be as tall as 12 inches. One, made of colored resin, portrays St. Joseph cradling the baby Jesus. Yet most home sellers favor the simpler three or four inch replicas - most of which are made in China and often depict St. Joseph as a carpenter.
Most statues come in a "Home Sale Kit" that is priced at around $5 and includes burial instructions and a prayer. One site, Good Fortune Online, recently added another kit with a statue of St. Jude - known as the patron saint of hopeless causes - "to help those with a difficult property to sell," the site says. Another site, Stjosephstatue.com, takes orders for its "Underground Real Estate Agent Kits" at 1-888-BURY-JOE.
Demand for the statues has been growing. Ron Weissman, who sells the statues at Good Fortune Online, says about six months ago he switched to online transactions because the increase in calls - from about two a week to 25 calls a day - was too much to handle. Richard Weigang, owner of www.catholicstore.com, says he sells about 400 statues a month, double the amount he sold a year ago.
In Catholicism, St. Joseph, a carpenter, is honored as the husband of Mary and foster father of Jesus. Representing a humble family man, he is the patron saint of home, family and house-hunting, according to the Rev. James Martin, a Jesuit priest and author of "My Life With the Saints." Popular belief holds that people who wish to enlist St. Joseph's help in selling a house should bury his replica upside-down in the yard. (Apartment dwellers are advised to put him in a potted plant.)
But, methods of burying the statue vary. Instructions in one package give buyers several options, including burying it upside-down next to the "For Sale" sign, burying it three feet from the rear of the house and burying it next to the front door facing away from the home. Phil Cates, owner of stjosephstatue.com, says: "I've seen it buried in all types of places with all types of ceremonies." He says the detailed burial instructions are largely intended to prevent people from forgetting where they put their St. Joseph. (His kits advise burying it facing it away from the house, to symbolize leaving.)
Theologians say there's no official doctrine that calls for the statue's interment. The practice may have stemmed from medieval rites of land possession, in which conquerors claimed land by planting a cross or banner, says Jaime Lara, associate professor of Christian Art and Architecture at Yale Divinity School. Mr. Lara also suggests that the tradition may have gotten mixed up at some point with folklore surrounding St. Anthony. St. Anthony, known as a matchmaker, would often be held ransom, upside-down, until he found a husband for someone's daughter, he says.
Some clergy aren't sure how St. Joseph would feel about his replica ending up on its head in the dirt, and suggest displaying it somewhere in the house instead.
"I think it's much more respectful than burying the poor guy," says Msgr. Andrew Connell, the archdiocesan director of the Pontifical Society for the Propagation of the Faith in Boston. Some retailers, such as Mr. Weigang, owner of www.catholicstore.com, also encourage buyers to put the statues in the house.
"We don't advocate burying," he says. "Some of those statues are quite beautiful."
Catholic leaders also say that faith and devotion are necessary, in addition to burying a statue, otherwise the practice amounts to little more than superstition or magic. But they are also enjoying the saint's newfound popularity. "If they have a good result and they think it was St. Joseph, it might inspire them to practice more," says Msgr. Connell.
The St. Joseph "Underground Real Estate Agent Kit" from www.stjosephstatue.com. Once someone's home sells, the custom holds, the statue should be dug up and put in a place of honor in the new home. That's what Ms. Luna did after she and her husband sold their house shortly after burying St. Joseph. She put the statue in her office in their new home in Portland, Ore. But not everyone is aware of the follow-up step. Trudy Lopez and her husband buried a statue of St. Joseph when they were trying to sell their condo, even though Ms. Lopez is Jewish and her husband is a nonpracticing Catholic. They sneaked out late at night, worried they might be breaking a condo association rule. "And I'm thinking, 'If my family knew what I am doing, they'd die,' " she says. Soon they got an offer, but didn't realize they were supposed to bring the statue with them to their new home.
"I'm afraid a lot of the statues won't be unearthed and someone will go over St. Joseph's feet with a lawnmower," says Father Martin.
*Sara Munoz contributed to this entry
The Catholic saint has long been believed to help with home-related matters. And according to lore now spreading on the Internet and among desperate home-sellers, burying St. Joseph in the yard of a home for sale promises a prompt bid. After Ms. Luna and her husband held five open houses, even baking cookies for one of them, she ordered a St. Joseph "real estate kit" online and buried the three-inch white statue in her yard.
"I wasn't sure if it would be disrespectful for me, a Jewish Buddhist, to co-opt this saint for my real-estate purposes," says Ms. Luna, a writer. She figured, "Well, could it hurt?"
With the worst housing market in recent years, St. Joseph is enjoying a flurry of attention. Some vendors of religious supplies say St. Joseph statues are flying off the shelves as an increasing number of skeptics and non-Catholics look for some saintly intervention to help them sell their houses.
Some Realtors, too, swear by the practice. Ardell DellaLoggia, a Seattle-area Realtor, buried a statue beneath the "For Sale" sign on a property that she thought was overpriced. She didn't tell the owner until after it had sold. "He was an atheist," she explains. "But he thanked me."
Some Catholic clergy are uncomfortable with the St. Joseph's trend. Statues of St. Joseph sold online can be as tall as 12 inches. One, made of colored resin, portrays St. Joseph cradling the baby Jesus. Yet most home sellers favor the simpler three or four inch replicas - most of which are made in China and often depict St. Joseph as a carpenter.
Most statues come in a "Home Sale Kit" that is priced at around $5 and includes burial instructions and a prayer. One site, Good Fortune Online, recently added another kit with a statue of St. Jude - known as the patron saint of hopeless causes - "to help those with a difficult property to sell," the site says. Another site, Stjosephstatue.com, takes orders for its "Underground Real Estate Agent Kits" at 1-888-BURY-JOE.
Demand for the statues has been growing. Ron Weissman, who sells the statues at Good Fortune Online, says about six months ago he switched to online transactions because the increase in calls - from about two a week to 25 calls a day - was too much to handle. Richard Weigang, owner of www.catholicstore.com, says he sells about 400 statues a month, double the amount he sold a year ago.
In Catholicism, St. Joseph, a carpenter, is honored as the husband of Mary and foster father of Jesus. Representing a humble family man, he is the patron saint of home, family and house-hunting, according to the Rev. James Martin, a Jesuit priest and author of "My Life With the Saints." Popular belief holds that people who wish to enlist St. Joseph's help in selling a house should bury his replica upside-down in the yard. (Apartment dwellers are advised to put him in a potted plant.)
But, methods of burying the statue vary. Instructions in one package give buyers several options, including burying it upside-down next to the "For Sale" sign, burying it three feet from the rear of the house and burying it next to the front door facing away from the home. Phil Cates, owner of stjosephstatue.com, says: "I've seen it buried in all types of places with all types of ceremonies." He says the detailed burial instructions are largely intended to prevent people from forgetting where they put their St. Joseph. (His kits advise burying it facing it away from the house, to symbolize leaving.)
Theologians say there's no official doctrine that calls for the statue's interment. The practice may have stemmed from medieval rites of land possession, in which conquerors claimed land by planting a cross or banner, says Jaime Lara, associate professor of Christian Art and Architecture at Yale Divinity School. Mr. Lara also suggests that the tradition may have gotten mixed up at some point with folklore surrounding St. Anthony. St. Anthony, known as a matchmaker, would often be held ransom, upside-down, until he found a husband for someone's daughter, he says.
Some clergy aren't sure how St. Joseph would feel about his replica ending up on its head in the dirt, and suggest displaying it somewhere in the house instead.
"I think it's much more respectful than burying the poor guy," says Msgr. Andrew Connell, the archdiocesan director of the Pontifical Society for the Propagation of the Faith in Boston. Some retailers, such as Mr. Weigang, owner of www.catholicstore.com, also encourage buyers to put the statues in the house.
"We don't advocate burying," he says. "Some of those statues are quite beautiful."
Catholic leaders also say that faith and devotion are necessary, in addition to burying a statue, otherwise the practice amounts to little more than superstition or magic. But they are also enjoying the saint's newfound popularity. "If they have a good result and they think it was St. Joseph, it might inspire them to practice more," says Msgr. Connell.
The St. Joseph "Underground Real Estate Agent Kit" from www.stjosephstatue.com. Once someone's home sells, the custom holds, the statue should be dug up and put in a place of honor in the new home. That's what Ms. Luna did after she and her husband sold their house shortly after burying St. Joseph. She put the statue in her office in their new home in Portland, Ore. But not everyone is aware of the follow-up step. Trudy Lopez and her husband buried a statue of St. Joseph when they were trying to sell their condo, even though Ms. Lopez is Jewish and her husband is a nonpracticing Catholic. They sneaked out late at night, worried they might be breaking a condo association rule. "And I'm thinking, 'If my family knew what I am doing, they'd die,' " she says. Soon they got an offer, but didn't realize they were supposed to bring the statue with them to their new home.
"I'm afraid a lot of the statues won't be unearthed and someone will go over St. Joseph's feet with a lawnmower," says Father Martin.
*Sara Munoz contributed to this entry
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