Get Out From Under That Dark Cloud

It seems that every day we read another story about the demise of the housing market and the failing U.S. economy. Let's face it, bad news makes headlines quicker than the good stuff. Unfortunately this proliferation of doom and gloom has helped to create a climate of wariness and skepticism. Now, these negative feelings have prompted potential investors to sit apprehensively on the sidelines with their hands in their pockets.

It's time to get out from under that dark cloud of doubt and see the housing market in a more positive light. Remember, many very successful people have made fortunes based on investments they secured during these types of economies. Here are a few positive headlines reflecting high points in our economy for the summer of 2008.

Mortgage Rates Go Down – Again!

Mortgage interest rates are at record lows. Reduced rates combined with low house prices create a recipe for a smart real estate investment. Here is a summary of the survey results as of July 18/08:

30-year fixed: 6.42%, down from 6.48% last week (avg. points: 0.45)

15-year fixed: 5.95%, down from 6.01% last week (avg. points: 0.41)

5/1 ARM: 6.05%, unchanged from last week (avg. points: 0.37)

Existing Home Sales Increase!

Nationwide existing home sales have increased. These numbers (in millions) are based on closings for single-family homes, town homes, condominiums and co-ops:

May/08: 4.99

April/08: 4.89

Total increase 2%!

Residential Auctions on the Rise!

Auctions are a form of home sales that have grown in popularity ever since the housing crisis, but may become the norm in the future. Revenues from residential real estate auctions had gross sales of $16.9 billion in 2007, up from $11.5 billion in 2003.

Home Sales are Stabilizing

The overall impression being conveyed by economists is that home sales have stabilized and increases are expected to continue for the balance of 2008. The subprime lending crisis is almost over, and now it's time to deal with the fallout.

Home prices are also expected to increase. Especially high increases are predicted in areas hardest hit such as Miami, where jumps of almost 50% are expected.

The mortgage climate is much more stable with responsible lending practices being put in place. It may be a little harder to get a mortgage than before, but people are being forced to save and invest responsibly.

Home Buyer Tax Credit

The Home Buyer tax credit is intended to add incentive to new buyers by providing a first-time home buyer tax credit of $7,500 for the purchase of any home used as a principal residence and closed on between April 9, 2008 and April 1 2009. Hopefully this will increase home sales, causing inventories to fall and stabilize home prices.

When You Need Shelter – Choose Real Estate!

According to Lawrence Yun, the Chief Economist for NAR, real estate is still one of the strongest investments for your money. “Between 1995 and 2004, the average renter accumulated $4,000 in wealth. In contrast, the average homeowner accumulated $184,400.”

This is the best buyers market we’ve had in years, and now is the time to plant the seed for future investments.

If you still aren't convinced, then let real estate tycoon Donald Trump convince you:

As reported by Real Estate News on July 17, 2008, "Trump's Palm Beach Mansion Goes for $100M" Even in this market where house prices have been dropping at record highs, Donald Trump managed to sell this piece of real estate for $100 million to Russian fertilizer billionaire Dmitry Rybolovlev. This resulted in a whopping profit of $59 million dollars! In 2004 he paid a meager $41 million for the 60,000 square foot beachfront mansion.

In Mr. Trump's words, "In an age of so many people getting hurt in real estate, it shows that you can still do well in real estate."