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:

REAL ESTATE INVESTMENT:



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 PRICE DECLINES, HOUSING STILL 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.

http://www.nahb.org/news_details.aspx?newsID=5639

Market Prediction. Who's Right About the Housing Market?

Market prediction, up or down. Most news about real estate market nowaday are all gloomy.
This article is interesting to read in it's full content.

The article is written by James A. Crumbaugh, who has worked exclusively in the real estate industry for more than 35 years. He said that the worst article he has ever read in his entire adult life, was a recent column in the July 9, 2007, issue of BARRON’S.

This article from BARRON’S said that the real estate market in the US will go down another 30%.

MONDAY, JULY 9, 2007
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Why a Housing Recovery Is Far Off
By IAN SHEPHERDSON
THE SPEED OF THE DROP IN HOME SALES has slowed over the past few months, leading some commentators to argue that the housing-market crisis will soon be over. But it's far too soon to start anticipating a recovery. In fact, there are solid reasons to think that the bottom might not be reached for a year or more.
The dynamics have changed since sales began to fall in the summer of 2005. At that time, the Fed was in the middle of its program to normalize short-term interest rates, which inexorably raised the cost of adjustable-rate mortgages. The flood of cheap ARMs when the fed-funds rate was very low was a key driver of the housing boom's latter stages. Many borrowers who were lured into the market by the availability of cheap ARMs should never have been granted loans, but there weren't many complaints at the time.

http://online.barrons.com/public/article/SB118377332233059776-u87JfztvY4J1exeyrMrsWt0taAM_20070806.html


Experts vs. Neophytes - Who's Right About the Housing Market?
A U.S. Real Estate Pro Disagrees with British Economist's Dire Industry Outlook
Written by: James A. Crumbaugh III
July 25th, 2007 - 1:00 am

Every day we get to read another scare story about the real estate market. Some of these articles drive me up the wall because they are written by someone that has never spent a day working in the Real Estate industry, or they are written by a stock broker or some other neophyte.
However, the worst article I have ever read in my entire adult life, and I have spent my entire adult life in the real estate industry, was a recent column in the July 9, 2007, issue of BARRON’S. Before I address this article, let me give you a little background on myself. I have worked exclusively in the real estate industry for more than 35 years. I have owned and sold real estate companies, the most recent a six-office Prudential franchise with 200 REALTORS, 2,000 closed sales per year and almost $300 million in sales volume.
I sold the company at the very peak of the real estate boom because I took my own advice. I used to write a weekly real estate column for a local newspaper in Southwest Florida. In the summer of 2005, I predicted this exact market and, as a result, sold my company to a company that had been courting me for years.
My forecasts have been so accurate over the last three years that the local newspaper is running my articles from 2005 and asked me to write new articles on my view of the real estate market over the next few years. With that said, let me address the article that has my hair (what’s left of it) standing on end.

http://www.realtown.com/articles/experts-vs-neophytes--whos-right-about-the-housing-market

Real Estate Sky Won't Fall: Here's Why

Realty Times

Real Estate Sky Won't Fall: Here's Why
Jun 07, 2007, 12:06 pm PDT

Real estate hasn't made much of a case for itself lately and it's not getting much help from any of the sub industries, such as builders and mortgage makers. Just in the past few weeks, so called experts from the mortgage industry, the building industry, and the resale real estate industry have all been quoted as saying that the sky is falling.

Nice job guys!

And while real estate's reputation as the number one investment is on the ropes, the general media and other investment categories have stepped up their attacks on real estate value.

What do you need to know?


The Sky isn't falling.
The real estate market always fluctuates.

Real estate sales prices are largely determined by the principal of substitution and reflect the uniqueness of the property, at a specific point in time, competing against only those other similar properties that happen to be available for sale, at that point in time.

If there are many similar homes available at that time, there will be downward pressure on sales prices. As an expanding population absorbs the excess, competition for a dwindling resource will cause selling prices to escalate.


Real estate is unique.
There's a reason that homes and real estate aren't traded like commodities on the Chicago Mercantile. They are too dissimilar. Even each tract home has a somewhat different location, orientation, lot dimension, proximity, and view.


There is no bubble.
The value of real estate isn't driven by speculation; it's driven by its utility. If the economy moves away, such as in the rust-belt, that utility may decline. If high paying jobs are headed into a region, the value of the scarcest of all commodities, real estate will rise.

Increasing development costs absolutely guarantee that new construction will cost more than existing properties are selling for.

This factor alone has caused many developers to mothball projects in the pipeline until shortages again push prices up.


Value is a complicated cocktail.
Assessed value, appraised value, market value, replacement value, and selling price all mean something different. When the media says that real estate values are falling, they really mean that the prices people paid for a small number of homes, last month, was less than what a different group of people paid for a different assortment the month before.


There is always a baseline of demand.
An increasing population must be housed. There is a natural ebb and flow, not a boom bust. At various times, demand outstrips supply; supply is increased until the surge recedes to baseline or below.


There is always a baseline of mortgage defaults.
There will always be unforeseen circumstances that will bring some homeowners into default. Even in good economic times. And even with good mortgage loans. In an appreciating market, they are able to sell in a short period of time. So, in most markets, foreclosure activity has been below the historic baseline.

Now, it could increase, spiking a little to reflect those who can no longer survive on increasing equity and then may level out at baseline again. When the next rapid appreciation cycle begins, and it almost assuredly will, rates may fall back below the newly adjusted baseline.


There is no risk.
Save the term risk for high stakes poker in Vegas.

Buying real estate isn't inherently risky. But it isn't a get-rich-quick scheme, either. It's a formula for building long term wealth.


Real estate is a great way to build wealth.
You have to live somewhere. If you rent, you are making some or all of someone else's mortgage payment. But even if you have to work two jobs and barely scrape by to make your own mortgage payment, you are building equity that over time will be quite substantial.

So, perhaps, don't believe every "the sky if falling" report or article. Educate yourself on the market and happy wealth homeowning!

http://realestate.yahoo.com/Real_estate_news/story?s=rytimes/item-4bcc1fc619fd6bf106034420ddf198de.html