When looking at the real estate market, I am reminded of the story about a group of blind men sent out to investigate and describe an elephant. Each returned with a quite different description, depending on which part of the elephant they each touched and explored. None could describe the whole elephant – it was just too big.
In the real estate market, prices are down and probably will go down some more this year. This is certainly one view of the elephant, and an important subject for another post, or for a phone call. A longer perspective of price appreciation, however, gives a different view of the beast. Forbes said recently, “With all the teeth-gnashing over the real estate bubble, the bust and the mortgage mess, you can be forgiven for failing to notice this little tidbit: Housing had a superb decade – 58% average gains per square foot!” Let’s take a comparative look: The chart below from MSN Money shows the return on an investment in stocks compared to owning Real Estate over the past ten years.
Now that’s Interesting! Even with the recent plunge off the bubble in home values, real estate outperformed the stock market! I would also note that you can’t live in a stock certificate. The point is that for the past few years we have focused on the short-term prices of houses, when for generations Americans have considered home ownership as part of the American dream – a place to live and raise their families. And in the long run, it was a pretty good investment, too.
Recently, Realtors have noticed that older customers, who have lived in their homes and raised their families, are advising their children of this generation to buy a home. It’s often good advice. That first home purchase is an important step into becoming established in a community, into taking roots. If you are considering your first home purchase, or you are advising someone to make that first purchase, please have them visit this web page For First Time Home Buyers. It is designed specifically to help them in today’s market. Yes, the process of buying a home, like nearly everything else, has changed from the past. I would be glad to discuss home ownership with them. First time buyers are my favorite clients. Tell them about the elephant.
Bob Ashauer
618 581 1695
