Home affordability ticked up again as rock bottom real estate prices continue to create tremendous opportunity for would be buyers. Just like the rest of the data out there, affordability is another means in which a potential consumer can determine whether its a great time to buy and the probability of future price increases. Tight lending continues to place downward pressure on real estate but as the economy continues to improve and a rebound of real estate prices continues to gain solid traction you will see lenders begin to open up their lending standards to allow more individuals to qualify. We may never see the likes of lending standards pre-recession but credit is bound to open up eventually. As I tell clients, it makes no sense in any universe when you can walk in to a car dealership and buy a $30,000 dollar car with zero down on a signature but buying a $30,000 house is challenging. There are programs out there now that will allow credit scores down to 580 with a compelling story and down payment assistance for low to moderate income families of $7,500 which can help the market. Have you thought of buying a home? Real estate has never been cheaper. Check out the article below!
Housing affordability has not been cheaper in 20 Years! A Buy sign of opportunity!
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Wow! another spectacular showing for our real estate market! The news just keeps getting better and better. All of a sudden not only is there a light at the end of our real estate tunnel but there is a whole new paradise starting to form! As I have been writing, it is safe to assume the worst of our market is definitely behind us. As our unemployment rate continues to fall and the demand for highly skilled labor continues to rise, pay increases should begin to occur in the region more readily further driving our economic growth and thus our market. Dan Gilbert and the quicken folks are doing some pretty amazing things in the Downtown Detroit market that will continue to drive this region. There are over 80,000 jobs in downtown Detroits central business district and more are coming as technology, automotive and bio-medicine continue to drive solid footholds in the region expanding our markets job diversification. Wayne State University just announced yesterday the expansion of a new $98 million bio-tech incubator, couple that with Vanguard and Henry Ford Hospital systems nearly $1.4 billion reinvestment in the city of Detroit, you can bank on the fact this will be a tremendous job driver in the region as our market pushes into more critical hard to replace fields. A strong Detroit is critical for the success of this area and its starting to happen!
Now is the year to make a decision. Finally! After a long hibernation reports are coming out left and right about real estates rebound. Its been over four years now that real estate prices began their downward decent. The stock market is growing, jobs nationally are growing as more employers look to grow their operations. In south east Michigan we are experiencing a shortage of engineers, skilled labor, technology experts and the list goes on and on. Dan Gilbert from quicken loans recently made a push to try and hire some of the laid off Yahoo worker from silicon valley. In a day he got over 7000 hits on his request. Twitter is moving an office to Detroit, office space absorption is growing in the region. All of these are positive economic indicators for this area. We already know real estate has been on the rebound for almost nine months in the area but things are really starting to get interesting now. The most important indicator has shifted now: consumer confidence. Once consumers think the market has returned its just a matter of time…
Everyone always wants a piece of the action; the problem always lies when the other persons piece takes precedence over your piece. How can you ever be sure your financial adviser is truly looking out for your own best interest? If you really ask yourself this question the honest to goodness answer is you cant. All you can do is hope. This may come to no surprise to some of you but most financial advisers work on commission! Take the latest wall street journal article below. A study conducted by the National Bureau of Economic Research found, “Financial advisers not only fail to curb investors’ worst habits, they actually tend to reinforce them — especially when those habits generate fees for the advisers.” So how can a small investor take matters into their own hands? Build for a plan helps buy investments with predictable flows of income tied to actual assets instead of paper money like securities which tie interests to the fate and whims of your adviser. More millionaires are minted through Real Estate because Real Estate is a tangible asset that over the long run appreciates and has steady predictable cash flows!
Below is a real interesting article about the growth of Self Directed IRA money and alternative investments. It helps to highlight in the article that individuals often times turn to this strategy in their portfolio in an attempt to diversify away from big money management and try to put back some semblance of control into investing. We have successfully helped individuals invest in real estate and private lien placements through a Self Directed IRA account. Just like normal IRA, of 401K investing; a self directed Traditional IRA has the unique advantage of profiting tax free until the money is withdrawn. If you have a Roth IRA, these can be converted into self directed Roth IRA account as well and since taxes were paid initially, any income coming into the IRA will never be taxed! Imagine this simple scenario: Say you have a Self Directed Roth IRA with $50,000 in it. You use your new IRA to buy a home cash for $50,000 all in cost. Your rent payments after expenses could be in the vicinity of 500 a month or about $6,000 a year giving you a constant rate of return of about 12%. Its pretty good, but unlike the stock market or any fund you may be investing in, real estate appreciates in value over time and rents because of inflation appreciate over time. In a fixed fund your money becomes worth less because of inflation! Think about the value of $100,000 in 1970 versus today. Think about the value of property today versus 1970… rents…