Housing, Best or Worst Investment Risk? What is your Place Worth?

HOUSING VALUES INCREASE THROUGHOUT THE WORLD

Recent reports in the U.S. press have spoken of the increased value of housing in the United States. We are researching this trend, but have also seen a trend in increased housing values throughout the world. While we have encouraged investors to invest funds in our selected Asian financial institutions that show CD rates of 14% or higher, many people prefer to invest in housing. Now we know that this trend can "boom" and "bust".  And timing is the key to a good solid housing investment. 

In the United States, the leader in housing price increases is of course, California.  In areas such as Los Angeles, Santa Monica, Carmel, San Francisco, San Diego, the areas near the ocean have increased substantially since the 1950's. In 2005 a realtor in Santa Monica told us: "Our challenge is inventory. We can't find enough properties. Houses that sold for $900,000 last year are selling for $1,000,000 this year."  But when there is a national recession everything seems to stop. 

In Santa Monica, housing within 1 mile of the ocean are selling on average for $800 per square foot of living area in 2005. The "mean" in the USA is closer to $75 per square foot. And there is demand in California, even at current high levels. In many cases, houses are often "bid up" in price after they are put on the market. Other major cities, in the United States are showing increases in housing values.

In Chicago, the price of a residential property has gone up 15% in the past 14 months. In Boston, New York, Santa Fe, residential prices are going up. The high prices of housing appears to be a "Blue State" phenomena.

Housing in the "heartland" states, (Red states) Iowa, Oklahoma, Kansas, is stable, but housing is selling in a price range of $65 to $95 psf (per square foot) vs a range of $150 to $300 psf, or even higher, in other areas. In Houston, Dallas, and Fort Worth, nice housing is selling for $100 to $160 psf, with lesser quality housing in older neighborhoods selling from $55 to $70 psf.

WHAT IS YOUR HOUSE WORTH?

If you are curious, but don't want to spend a lot of time and money, we can give you a listing of a few sales in your area. That is easy. Or call us and ask for an appraisal.  While we try to only do Commercial Valuations, we can give you an "other valuation" within 3 days. Just to make it convenient, we can offer a quick scan showing sales in your neighborhood, in almost any community in the USA from data available to us by internet and networking sources. This is not a FIRREA appraisal, but rather citation of simple market data. Let us know and we will give you a quick market "abbreviated brokers opinion" of sales in your area, for a fee to cover secretarial costs of $50 If you want a full appraisal, contact our office at: benboothe@gmail.com.

WHAT IS DRIVING THE VALUES OF HOUSING?

• LOW INTEREST RATES
• EASY FINANCING AVAILABILITY
• TWO WORKER INCOMES INCREASING BUYING POWER
• INSECURITY OF OTHER INVESTMENTS
• MANY NATIONS ARE OFFERING TAX INCENTIVES FOR COMPANIES OR INDIVIDUALS TO INVEST IN REAL ESTATE

INTERNATIONAL OUTLOOK

As international economic growth continues, housing is also increasing in value around the world. Incomes are rising, banking systems are learning more about lending on mortgages, and more and more people are buying "upper scale" housing. Housing is proving to be an excellent investment for international purchasers. But people should know that if an economic recession occurs housing could go down in value as well. 

• INDIA shows an emerging boom in new housing. Areas such as Pune, Mumbai, and near the International Airport in Delhi host dozens of luxury housing areas,
• ECUADOR AND LATIN AMERICA, are seeing more people building nice homes. Banks are increasing "mortgage lending" on longer term notes, fueling demand.
• GERMANY, SWITZERLAND, FRANCE, all have seen increases in housing values, even though housing was already high.
• MONGOLIA shows more new projects with foreign investors developing apartments, housing, and commerical investment. Tax laws encourage investment in real estate, and a large percentage of the population still lives in traditional projects or "Ghers" (tents).
• MEXICO is expanding in "luxury" housing, as well as an increase in smaller housing, as banks make credit available.

WILL THE BUBBLE BURST?

This question depends upon the general economy and interest rates. Historically, as interest rates increase, the ability for investors to afford to financing declines. Politically, both the Clinton and Bush administrations pressured federal agencies to keep interest rates low. But rates are now gradually increasing. The bubble could burst, and home prices in a recession could go down for a few years, but we believe that in the long term, housing will continue to be the most stable investment, for stable growth available. If it does burst, this would be a good opportunity for investors to seek out bargains. We can help you find housing opportunities, throughout the USA, Ecuador, India, Nepal, Cambodia and Mongolia.

HOW TO PROTECT YOUR INVESTMENT

If you have a property that has gone up in value, it may be to your advantage to have the property appraised, to provide "independent verification" of current values. This would offer some legal and financial protection, if the general market declined, and your lending bank felt regulatory pressures to "call loans" or "reduce real estate lending balances". We have seen this happen in past recessions. Some people who were highly leveraged, lost their real estate properties, because they weren't prepared, or hadn't documented their property values.

If you need an independent appraisal, call Boothe and Associates, Inc., at 817 738 9595. There may be other reasons to appraise your property, such as documenting values while they are high, to increase your borrowing ability. Since we are active in 20+ nations, BBAA (Boothe and Associates) has a unique perspective and contact in the world of international real estate. Let us know if we can be of help to you! Ben B. Boothe Economic Consultant 817 793 1484

MEMORIAL DAY...CROSSES ON THE BEACH

Memorial Day was celebrated across America to remember those who have died for the USA.

But the event, in Los Angeles, perhaps was the most unique of all. It was put on by U.S. veterans, many of whom had fought in Iraq. These men, put up a cross on the beach, facing the Pacific (peace) Ocean, for every U.S. soldier that has died in Iraq.

The U.S. veterans then read the names of all of the dead Americans, and made a statement. "THIS WAR WAS WAGED BASED UPON LIES. NONE OF THESE MEN SHOULD HAVE DIED. THESE WERE OUR BROTHERS. WE, AS AMERICAN PATRIOTS, HAVE FOUGHT FOR OUR COUNTRY, AND WE WILL GLADLY FIGHT AGAIN, BUT NOT FOR A LIE...NOT IN IRAQ."

Thousands of people visited the site, near the Santa Monica Pier. The most moving vision, was 5 hispanic children, who sat in the sand gathered around one cross...the one with their father's name on it.