Like other aspects of the economy, the real estate market has been slow to recover to “normal” levels. But we believe there are some positives that come with the lull in housing sales. In some pockets of the country, prices have escalated substantially due to low inventory, high demand and relatively low interest rates.
According to the National Association of Realtors, existing home sales in the Midwest and Northeast bolstered the market in March. Buyers are also expected to be out in force in most regions of the country during this spring sales season.
The mid-priced market is much stronger than properties that are very low or very high priced. This is because fewer mid-level homes are on the market, and lenders have stringent qualifications, leaving many low-end potential homeowners on the sidelines.
If you’re in the market for buying or selling, consider talking with a qualified professional about how these changes may impact your financial strategy. Remember that profits may be able to be repositioned to strengthen your retirement savings, and that overextending for a real estate purchase could potentially impact your financial plans for the future.
It’s always good to review your retirement strategy within the context of your complete financial picture — particularly before you make any big decisions. Let us know if we can help you with your long-term financial goals.
It’s interesting that, despite the drop in home prices over the last decade, Americans still like their real estate. In a recent poll, 35 percent named real estate the “best long-term investment,” over stocks (22 percent) and gold (17 percent). Remember, investing involves risk, including the potential loss of principal, and no investment strategy can guarantee a profit or protect against loss in periods of declining values.
Millennials, on the other hand, favored savings accounts over real estate as their top choice. It just goes to show you that young adults have taken their first life lessons to heart, and that long-term experience can provide a wider perspective.
[CLICK HERE to read the article, “Existing-Home Sales Spring Ahead in March” from National Association of Realtors, April 20, 2016.]
[CLICK HERE to read the article, “Home sellers see strongest appreciation since the recession” from MarketWatch, April 21, 2016.]
[CLICK HERE to read the article, “Use the 20% Rule to Guide Real Estate Decisions” from NerdWallet.com, April 21, 2016.]
[CLICK HERE to read the article, “7 Home Buying and Selling Tips from the Property Brothers” from HGTV, 2016.]
[CLICK HERE to read the article, “Gallup: 35 Percent of Americans Pick Real Estate as ‘Best Long-Term Investment’” from NewsMax.com, April 20, 2016.]
[CLICK HERE to read the article, “Investors should look beyond REITs to gain real estate exposure: Jeffrey Kolitch” from Investment News, April 19, 2016.]
Raymond C. Lantz, Jr. is the president and founder of USA Wealth Group, Inc. Ray has many years of experience advising clients in retirement and sophisticated tax planning strategies, multi-family and commercial real estate projects, and legacy planning. Ray is a graduate of Clark University, holds a law degree from Boston College, and a master of laws in taxation from Boston University. You can hear him every Sunday on Money Wise with Ray Lantz on WBSM 1420AM or on the Radio Pup app.