The Great American Investment
Home or 2nd house vs Stocks and Bonds
In the near future we are living in the post-terrorist environment! People are concerned about future attacks and economic repercussions that future attacks will have on the economy. Many investors will prefer the safe harbor of tangible, income generating assets such as real estate over stocks and bonds and many other economically volatile income generating assets.
Homes have become much easier to sell in the last few years making the investment more liquid. The next time you need money call your stock broker and see if he knows anyone willing to lend you 80% of the value of your stocks or bonds. He will still be laughing when you hang up but he is probably the one that suggested you borrow on your house to purchase the stocks and bonds. Stocks and bonds will not keep you warm in the winter or cool in the summer as will a house!
I believe that single digit mortgage loans will continue thru the end of this decade. The housing market will continue to be excellent since one of the fundamentals at work in the housing market is tight housing inventories. Another factor is that people are living longer and many of the baby boom generation are now looking for their second or retirement home! Because inventories are low and construction is behind rather than ahead of demand, prices will continue to increase! 7 to 10% increase in value per year is now the norm, the central Oregon area spurred by developments like prong horn will see much more dramatic increases in housing prices!
Consider this scenario:
15 years ago John purchased a home for $50,000. He has made regular payments and brought down the mortgage to $20,000. Meanwhile, the property has appreciated to $150,000. His original $50k house has increase in value 3 fold or 300%. Since he has paid down the mortgage to $20K he is now at a 7.5 times asset to debt ratio, that is $150,000/20,000 = 7.5 X as much assets as debt.
Today's houses are doing the same thing except they have more initial investment. A good realtor can help you find properties that are exceptional values and then help negotiate you into the property for a minimum down payment!
I FIRMLY BELIEVE THE GREAT AMERICAN INVESTMENT FOR THE 2ND MILLENNIUM IS A HOME!
What is the 2nd best investment (not stocks and bonds)....but a second house!
Talk to me about Oregon buying or selling!
James L. Wardrope Principal Broker
Oregon River Realty.com
Information changes with time and may not be correct. Always contact an attorney for legal matters and me for Real Estate!
eMail: jlaselle@gmail.com RESIDENCE: 541 389-2359