Tag Archives:  For Buyers

Americans Rank Real Estate #1 Long Term Investment

Americans Rank Real Estate #1 Long Term Investment | Simplifying The Market

Americans Rank Real Estate #1 Long Term Investment

 Wednesday May 4th, 2016  First Time Home BuyersFor BuyersMove-Up Buyers

The Gallup organization recently released a survey in which Americans were asked to rank what they considered to be the “best long term investment.” Real estate ranked number one, with 35% of those surveyed saying it was a better long term investment than stocks & mutual funds, gold, savings accounts or bonds.

Here is the breakdown:

Americans Rank Real Estate #1 Long Term Investment | Simplifying The Market

The survey revealed that real estate was the number one choice among each of the following groups:

  • Men
  • Women
  • People between the ages of 18-29
  • People between the ages of 30-49
  • People between the ages of 50-64
  • People 65 and older
  • People with annual earnings of less than $30,000
  • People with annual earnings between $30,000 and $74,999
  • People with annual earnings of over $75,000
  • People with a college degree
  • People without a college degree

Even stock investors ranked real estate number one. According to the report:

“With housing prices showing a steadier path upward in recent months, even stock investors are about as likely…to choose real estate (37%) as stocks (32%) as the best long-term investment.”

This Friday, I will be posting an infographic showing additional findings revealed in the report.

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Billionaire: Buy a Home… And if You Can, Buy a Second Home!

Billionaire: Buy a Home… And if You Can, Buy a Second Home! | Simplifying The Market

Billionaire: Buy a Home… And if You Can, Buy a Second Home!

 Monday May 2nd, 2016  First Time Home BuyersFor BuyersHousing Market UpdatesMove-Up Buyers

Three years ago, John Paulson gave a keynote address at the CNBC/Institutional Investor Conference. In his speech, he told those in attendance that he believes housing will continue its strong recovery for the next 4 to 7 years, saying that:

 

"The housing market has bottomed. It's not too late to get involved. I still think buying a home is the best investment any individual can make. Affordability is still at an all-time high."

When asked how the average person could take advantage of the current real estate market at the time, Paulson said:

“Buy a home and, if you can, buy a second home.”

Two years ago, Paulson reiterated his statement, saying:

"I still think, from an individual perspective, the best deal investment you can make is to buy a primary residence that you're the owner-occupier of."

Who is John Paulson and why should you listen to him?

Paulson is the person who, back in 2005 & 2006, made a fortune betting that the subprime mortgage mess would cause the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell.

What do others think of Paulson?

According to Forbes, John Paulson is:

“A multibillionaire hedge fund operator and the investment genius.”

According to the Wall Street Journal, Paulson is:

“A hedge fund tycoon who made his name, and a fortune, betting against subprime mortgages when no one else even knew what they were.” 

So… Is what he said still true?

The core reasons behind Paulson’s statements still ring true today, but why does he believe homeownership is such a great investment?

Paulson broke down the math of homeownership as an investment:

1. "Today financing costs are extraordinarily low.”

The latest numbers from Freddie Mac show us that you can still get a 30-year mortgage at historically low rates of under 4%.

2. “And if you put down, let's say, 10 percent and the house is up 5 percent,” as many experts predict,“then you would be up 50 percent on your investment."

How many are seeing a 50% return on a cash investment right now?

Paulson goes on to compare the long term financial benefits of owning versus renting:

3. “And you’ve locked in the cost over the next 30 years. And today the cost of owning is somewhat less than the cost of renting. And if you rent, the rent goes up every year. But if you buy a 30-year mortgage, the cost is fixed.”

Bottom Line

Whenever a billionaire gives investment advice, people usually clamor to hear it. This billionaire gave simple advice – if you don’t yet live in your own home, go buy one.

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Buying a Home is 36% Less Expensive Than Renting Nationwide!

Buying a Home is 36% Less Expensive Than Renting Nationwide! | Simplifying The Market

Buying a Home is 36% Less Expensive Than Renting Nationwide!

 Tuesday April 19th, 2016  First Time Home BuyersFor BuyersInterest RatesMove-Up Buyers

In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers actually show that the range is an average of 5% less expensive in Orange County (CA) all the way up to 46% in Houston (TX), and 36% Nationwide!

Other interesting findings in the report include:

  • Interest rates have remained low and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation.
  • Some markets may tip in favor of renting if home prices increase at a greater rate than rents and if – as most economists expect – mortgage rates rise, due to the strengthening economy.
  • Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, let’s get together to discuss the best course of action to get you into your dream home!

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