Wednesday, November 14, 2007

Home Value.

As I posted on my web site, homes and land are long term investment and it is still a safe investment with minimum risk. I also stated that my Real Estate investments so far have fair much better than my stock portfolios.

Here is a excerpt from my web site:


In today changing Real Estate market, it is important to remember that Real Estate is still a good long term investment.

It is an investment that the investor is practically utilizing other people's money to acquire appreciating assets on which the profits can be realized at 100% tax free. The risks in Real Estate investing can be offseted by the potential of long term gain. As investor and home owner, your monthly rent payment is now convert to a monthly mortgage payment which accumulate values over the years.

As an example, if an investor put a $15,000 down payment in a condo and lived in it for 5-6 years, she definitely made a good investment. Many of the owners of a condo in Murrieta bought it for around $89,500 in 2001 and if they just resold in 2007 for $290,000. This is overall translated to about $200,000 appreciation (profit tax free). Yes, the investors probably could have gotten $310,000 for the condo earlier this year but then he/she would have to pay higher prices for another property that

he/she wants to purchase to replace the condo.

I have been buying and selling Real Estate for the last 36+ years. When I bought my first home in Santa Clara for $70000 in 1975, it sold for about 10 times+ it's original price. This is not a guarantee or a result to be expected by everyone but there are similar results in the real estate appreciation in California in the past 30+ years.

According to the California Association of Realtors and The National Association Of Home Builders. Housing is still a safe long-term investment.

Despite declining home prices as recently reflected in an S&P/Case-Shiller home price statistics survey, on average, the nation's top markets have experienced price appreciation by as much as 50 percent over the past five years, according to comparable data from the National Association of Home Builders (NAHB).

"It's important to keep things in perspective," said NAHB President Brian Catalde. "The current housing price correction is most pronounced in the once super-heated markets in California, Nevada, Florida and Arizona. In most other markets, price declines have been pretty modest."

According to the NAHB's comparable data tables, home prices in Los Angeles dipped 5.7 percent in the last year, but have appreciated by 88.9 percent since 2002. San Francisco home prices have declined 4.2 percent in the last year, but have seen appreciation of 46.7 percent since 2002. Home prices in San Diego have fallen by 8.3 percent in the last year, but have appreciated 54 percent since 2002, according to the report.

1 comment:

Raj said...

The process of purchasing an investment property is very different to that of buying a home for example, for you and your family to live in. There are many other considerations that must be taken into account before making this big step.

The buy to let boom of recent times has seen many more competitive mortgage deals become available, adding fuel to an already blazing fire. Many borrowers have found that they have come unstuck whilst jumping on the bandwagon without properly researching the proposed venture.