Home Prices Might Rise Sooner than you think!

I found this on the web and thought it was interesting enough to add to my blog about prices for home sales in the next few years....

Why Home Prices Might Rise Sooner That You Think
Published on Friday, September 17, 2010, 2:50 PM Last Update: 5 day(s) ago by James Crumbaugh III

I have been arguing that home prices will come back faster and stronger than anyone thinks. I have been making the case for this idea for some time now. I know most everyone thinks I’m out of my mind, including a close friend in the business who we had dinner with the other night.

I’ve been making this argument because I see a serious inventory situation shaping up in this country, and when there is no inventory to buy, prices skyrocket.

I’ve heard every argument - why I’m a fool, a moron, an idiot, my crystal ball has holes in it, and it’s Bush’s fault.

However, with all that said, let me give you another part of my argument of why I see the home values returning faster than anyone imagined – if we ever get Washington in order again and if we get our economy righted.

Today, I read an article that I have read dozens of variations of over the last three years. The article discussed how many homeowners are under water on their mortgages. We are talking about 4.1 million homeowners who are underwater. These are homeowners, for the most part, who aren’t in foreclosure and are making every effort to stay in their homes, with the plan of not moving, and knowing that someday they will have their mortgages paid off.

This is another reason I see the values returning. The sellers can’t sell these homes because they aren’t at this time worth what a homeowner would have to sell for to pay off their mortgage and have enough left over to buy another home. As a result this adds to the inventory shortage.

Also today, I read an article which stated that August 2010 had the highest number of home foreclosures ever in a given month. However, the banks are going to release these homes to the market slowly for the same reason I’ve been discussing. They know that an inventory shortage will cause home values to rise. The banks want to also see an inventory shortage knowing what I know. Prices will rise. This also adds to the inventory shortage.

I read another article today about a community in Southern California where the inventory is between 2 months and 3 months. And Surprise-Surprise, they saw homes values rise 11.4 % this year.

I guarantee you; I did not fall and hit my head. I’m not smoking anything funny, and I’m not blaming President Bush.

This economy will turn around. We will fix Washington, or vote all the bums out, and when we do turn this economy around, I would not be surprised if we weren’t down to a 2 or 3 month inventory in every desirable location in this country.

Only time will tell if I’m the biggest crack pot in this industry. So I ask you to watch this industry for the next two years. If we start seeing a 5% growth rate in this country, if we start getting the country’s debt under control, or at least not add any new debt, we will see the confidence factor for our country go up. When that happens, we will see people buying homes and second homes again, and when that happens we will see the inventory shortage become the next hot story, which in turn will create a demand. In our company, close to 50% of all buyer controlled sales are being bought with cash.

All of this portends a good time for our industry in the not-so-distant future.

Please don’t shoot the messenger.

James A. Crumbaugh III is CEO of Allison James Estates and Homes, a National Internet Based Real Estate Brokerage. You may reach Mr. Crumbaugh at jcrumbaugh@allisonjames.net

Rent or Own; What are the advantages to home ownership?

I found this article online at www.HomeKeys.com about the advantages to homeownership as opposed to renting, so I thought I would share it with you today...

7 Reasons to Own Your Home!

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources: www.homekeys.com