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Saturday, July 21, 2012

Home Ownership - Not just an investment!

One thing the housing market has (or should have) taught us is a home should not be considered one's primary investment.

I have heard and read numerous times that Americans have lost 40% of their wealth during the current economic crisis.  That is because their home was the primary investment tool.

Likely adding to the lost home values was the run up in debt as many took out second mortgages and home equity lines over the high growth periods five to seven years ago.  And lenders were feeding the frenzy.

But, in the end, we found out the spiraling increase in value of the homes was in reality only a paper appreciation.

And the paper wealth came down quickly.

Home owners all hope their house or condo will increase in value.  The chart below reflects the historical median sales prices for homes and condos in Florida over the past 4.5 years (through June 2012). 



The chart above clearly shows the housing market is cyclical.

There will be times when selling prices will be higher and periods of decline or little growth.  But, even if the value growth is not significant, at least you have you have a roof over your head and a lot of memories.

If you are ready to buy a home in Brevard County, Florida call me to discuss how I may assist you.  If you a first time home buyer, call me to discuss the process.



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