By Dave Parrish
Do you remember when, just a few short years ago, the government paid you $8,000 to buy a home if you hadn’t owned one in three years? How times have changed.
Today’s headlines: Pending home sales increased to the highest level since April 2010.
No government incentives today. But the market has improved enough to drive sales up to the sales level we were experiencing in those crazy days of the market valley when you got paid to buy a home and all the first-time home buyers were rushing to buy whatever was available to get their $8,000. The good news is that today’s growth is organic growth, truly market driven rather than by those very temporary incentives.
During those same days, all the “experts” were telling you: Don’t buy real estate, real estate is not coming back.
The days of real estate profits are over. Those same experts are now advising to buy real estate. For the past six years, the headlines have been filled with attention-getting (though not always accurate) headlines.
Here’s another recent headline: “Wall Street is scooping up tons of single family homes in America” or “Rally in real estate capital markets and strong housing growth predicted.” There are literally dozens more that I could site. Of course, today they are mostly trending in a very different and positive direction.
My advice: Avoid the hyperbole of the attention-getting headlines. Look at the facts. Real estate return on investment was up 46.1 percent between January 2000 and last month. Dow was at 33.3, S&P 12.5 and NASDAQ was down 17.1.
So what does the future look like? Bank of American projects future price projections at 8 percent compared to 4.7 percent previously. J.P. Morgan projects future price at 7 percent compared to 3 percent previously, and Freddie Mac projects future price at 4.5 percent compared to 2 percent previously.
This limited space isn’t sufficient to give you all the facts about the long-term and future performance of real estate, but that’s only about the money side of real estate. Real estate is so much more — it’s home, family, stability, legacy.
Now is a unique opportunity for those who have held back due to fear of the market future for real estate
. Real estate is back. While the absolute lowest prices are history for most markets, prices are still at bargain levels; and interest rates, while no longer at their bottom, are still close to their historic bottoms.
Ignore the headlines and look at the facts.
May the market be with you.