It’s the time to buy
December 13, 2005
Welcome Home!BY THETEAM@ELICH.COM
If you have been considering buying your first home, all indications are that the time is now! Economic indicators can help you decide for yourself that home ownership is the best investment. The housing market for 2005 is headed for a fifth-consecutive annual record, and sales activity in 2006 is expected to be the second best year in history, according to the National Association of Realtors. David Lereah, NAR’s chief economist, said that market conditions are still favorable for housing. “The slowdown amounts to a tapping of the brakes on a hot market,” said Lereah. “Home sales are coming down from the mountain peak, but they will level-out at a high plateau – a plateau that is higher than previous peaks in the housing cycle. This transition to a more normal and balanced market is a good thing.”
NAR President Thomas M. Stevens from Vienna, Va., said that housing has always been the soundest investment for most families. “As the old saying goes, homeownership beats the heck out of a drawer full of rent receipts,” said Stevens, senior vice president of NRT Inc. According to the Federal Reserve Survey of Consumer Finances, the median net wealth of a homeowner household is 36 times higher than a renter household. Stevens said that the national median home price has never declined since good record keeping began in 1968. “Although there can always be a temporary decline in a given area if jobs are weak and there is an oversupply of homes on the market, people who stay in their homes for a normal period of homeownership generally see healthy returns over time. There are no guarantees, but there are very good odds.”
The national median existing-home price for all housing types, which is experiencing a surge estimated at 12.7 percent to $208,800 for 2005, is expected to rise another 6.1 percent in 2006 to $221,400. The median new-home price is likely to rise 5.5 percent to $233,100 in 2005, and then grow by 7.3 percent next year to $250,100 as higher construction costs impact the market. The U.S. gross domestic product should grow 3.7 percent for 2005 and 4.1 percent next year. The unemployment rate is expected to decline to 4.9 percent by second quarter of 2006, and then stabilize.WELCOME HOME! is compiled each week by the TheTeam@ELICH.COM. Butch Elich’s team includes office assistant Claire Albers and associate broker Paula Parker. Find the ELICH.COM Team at RE/MAX Properties of the Summit in Frisco. They can be reached at (800) 806-9518.