Re: How about global investment options?
back2basicz
4/6/2011 11:17:39 AM
Phoenix,
I don't know why you chose that Username[Whether it has something to do with your Name or the place where your from];but its kinda appropriate for the discussion at hand.
Phoenix,Arizona was the scene of one the most devastating Real Estate bust in America.Even today there are a number of scam artists peddling the notion of "Super-safe returns" by investing in Phoenix real estate all the way in Australia& New Zealand!!!
As for the notion that overseas real estate markets represent more value.I strongly disagree.In fact,most overseas markets(especially in Asia) are today frankly speaking over-valued and do not represent Value for Money.If you spend sometime on the Ground in Asia(as I do regularly) I can tell you that significant large parts of Asian real estate are heavily over-valued and beyond the Purchasing Power of the Common Man there.
The real need of the hour is for affordable Low cost Housing all across Asia.Unfortunately Margins are very slim in that area[Which is why hardly any developers focus on that segment].
Yes one thing is for certain,that because down-payments are much higher in Asian Property & Securitization of loans is much lower[Most loans are held by the Original bank only];The chances of a Heavy crash are that much lower.What is more likely to happen is that you will see a correction of 20-40% whenever the Global Tide of Liquidity unleashed by the US Federal Reserve turns.
If I had to buy property today,I would rather put in High-quality Farmland not Built property anywhere.
Regards
Ashish.
How about global investment options?
Phoenix
4/6/2011 10:46:26 AM
The Asian market recovery has seen the property prices skyrocketing in countries like Singapore. In fact the government had to take measures to cool down the market. Would looking for global investments where property prices are going up with economic recovery advisable in comparison to buying in your own country?
Re: Why Buy when you can rent???
TelecomFreq
4/6/2011 9:30:07 AM
Ashish,
I can understand your reservations about owning a home, but I take a slightly different view. I see this as being an ideal time to buy a first home. Since prices are so low right now you can expect a very nice return once the market turns up. If you are in a location that you see yourself living in for more than 5 years it might be worth your while to look into finding a home that you think might make you a profit after a few years. Just a thought.
Re: Why Buy when you can rent???
ProfR
4/6/2011 9:25:26 AM
For an individual or family, buying versus renting is a more complex issue than just where the real estate market is. You also need to take into account how much money you have for a down payment, interest rates on mortgages, how much spending is needed on repairs, etc.
What is needed is a good easy way for people to look at their options (rent versus buy) and various scenarios related to the economy and housing prices.
More information is power!
ProfR
Re: Is that a Realtor behind those Rose-Colored Glasses?
Street Smart
4/6/2011 9:18:23 AM
Ashish, I completely agree with you that the tax deduction for mortgage interest is as close to a sacred cow as we have and isn't likely to disappear anytime soon. In fact, I take Obama's pronouncements about shifting away from being a nation of homeowners with a serious grain of salt, too! After all, the US Government is still the 80-ton gorilla in the mortgage markets.
I was just trying to make the point that even though these radical realignment scenarios may not be likely, they still erode confidence as opposed to building it--same as the ludicrous "death panel" talk did for health care.
I'm no economist but I think the consumer confidence construct is better applied to things like retail spending--or maybe durable goods rather than investment spending like real estate.
Investment markets like real estate that are prone to bubbles don't need more of the frothy bravado type confidence that feels so 2007 at this point, and the public is to be commended for not jumping right back into that old mentality. Bubble-prone markets need to be anchored in actual from-the-ground up investment fundamentals that make sense financially, demographically, and in terms of matching supply and demand.
Re: Is that a Realtor behind those Rose-Colored Glasses?
back2basicz
4/6/2011 7:28:08 AM
Street Smart,
Discontinuation of the Tax break(as you point out here);will lead to a massive-massive reduction in the contribution of Housing/Real Estate to the US Economy.
And there will be a massive impact on Homebuilders and related Industries as well.
These guys have enough Lobbyists stacked in Congress to raise a Massive Fear-mongering campaign to derail any Plans to eliminate the Tax break.
Now I am not speaking in favor or against-Just explaining how many people have an interest in maintaining the Status Quo as things stand.
If Housing really is in a Deflationary environment(as well as a Double-Dip as Case-Schiller Index points out right now)-then Housing will remain a Bad-Bad investment for atleast another Decade(if not more).
Regards
Ashish.
Why Buy when you can rent???
back2basicz
4/6/2011 7:12:55 AM
John,
Your quotation in the last line of the post,summed up the situation perfectly-
"
When the happier days will return is open to speculation. For now, one thing is clear. The housing market will remain fragile until average buyers start believing in it again."
I am looking at the situation primarily from the viewpoint of a First-time Home Buyer today.
Why should they put in the equity into buying a House,when there is little to no Hope of Appreciation in Property prices(atleast for the next 2-3 years) thanks to excessive inventory available on the market in most parts of the country???
Plus when you take into account the level of uncertainty that exists for most jobs today-Why take a chance with such a huge and immovable investment?
I know if I was in there shoes,I would'nt do it today.
Regards
Ashish.
Re: the only thing we have to fear is fear itself?
TelecomFreq
4/6/2011 12:41:10 AM
being a home owner I sometiems envy my friends who are renters. When somthing breaks in the apartment they just pick up the phone and call the landlord or the managment company. I, on the other hand have to ether fix somthing myself or call soemone to fix it.
Ultimately, owning a home has been beneficial to me. Even having just relocated and having sold my home in the current market, not only was my home on the market for just 25 days before it was under contract for sale, but i made a decent profit on my home due to some renovations i made. If you are a home owner and you invest your money in upgrades that will attract buyers you will see a return when it is time to sell.
Re: the only thing we have to fear is fear itself?
icebreaker1975
4/5/2011 11:31:06 PM
Used to be that purchasiing a home was the best "investment" that a person/family could make...these days, having a mortgage is old hat, with statistics showing that people are preferring to stay in apartments over homes. I wonder how long this "trend" will last?
Is that a Realtor behind those Rose-Colored Glasses?
Street Smart
4/5/2011 8:49:36 PM
It seems to me that there are forces at work in depressing the real estate market that are far more fundamental than consumer confidence. In fact, after several decades of gulping all the Kool-Aid that Fannie and Freddie could mix, I would say that the American public is absolutely right to muster all of the skepticism and cynicism it can!
The Obama Administration has publicly announced that it believes that continued home ownership for everyone is no longer a political priority. The possibility of discontinuining the tax deduction for mortgage interest looms as a distinct possibility in the not-too-distant future. The 2010 Census shows record unemployment in areas of the Northeast where the housing stock remains the largest, while shifting demographics show a less educated. lower earning Sunbelt workforce flocking to areas where they cannot afford to buy homes.
And all of this assumes that if one could afford a home it would be a good investment over, say 5-7 years. Can ANYONE claim any confidence in that notion?
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