Recently, the Demand Institute division of the U.S. Conference Board released a study called “The Shifting Nature of U.S. Housing Demand: The U.S. housing market is growing again – but not as we knew it.”  Among the broad conclusions are that rentals will be more popular, homes will be smaller, and most Americans still view home ownership as a good investment in their future. The study’s findings not a total surprise Increased demand for rentals is not a surprising result. Many homeowners who lost their houses to foreclosure will be forced to rent as they rebuild their credit. In addition, young adults have traditionally rented while saving for a down payment. In the real estate boom, some bought without down payments, sure; but new lending standards are requiring almost every...

A few years ago, homes were considered investments and many people bought them expecting to enjoy rapid appreciation. Those days are gone and home buyers are rediscovering another reason to buy a home – they need somewhere to live and buying can be more affordable than renting for most, especially given recent trends in rental prices. According to a recent article in the San Diego Union-Tribune, rents in San Diego County are rising as prospective renters are facing increased competition for apartments. The rental market has become more competitive because home buying has become a more difficult process. The need for a larger down payment and tighter credit standards has excluded many from the real estate market. Others have chosen to rent because they are concerned that home prices could...

When you retire, you no longer have to go to work everyday. Most people choose to live within a reasonable distance of where they work and buy a home within commuting distance. After retirement, there is no longer a need to live within commuting distance and retirees must make a choice on whether they will keep their existing home or sell it and move somewhere that they want to live. Ignoring this choice is actually a choice to keep their existing home. Why sell your home in anticipation of retirement? There are a number of reasons to consider selling your home. The home may be larger than what you need or want in retirement. It could also be in a neighborhood that you no longer want to live in. Many families decide where to live based on the quality of the schools in an area. But once the...

Many home owners are seeing one or more of the homes near them fall into foreclosure. If your neighbor is losing their house, or if the house a few blocks away is in foreclosure, you probably wonder what the impact will be on your property value. According to an economist at the Federal Reserve, the answer is that there might not be much impact on you, even if the distressed property is right next door. The impact of your neighbor’s foreclosure The Fed report cites another study which considered home prices in Massachusetts and estimated that foreclosure-related sales offer prices that are about 27 percent lower than a comparable property should sell for. These researchers also estimated that a foreclosure lowered the selling price of nearby properties (those within a radius of about...

If home prices deliver double-digit gains from their current depressed levels, it will take about five years until they get back to their 2006 highs. Sustained annual price gains of ten percent a year are unlikely in any market, making the best case of a full recovery in home prices by 2017 an unlikely event. With average gains of five percent a year, prices could reach new highs in about 2021 – nine years from now. Housing markets still sluggish The reality that it will take years to recover from losses is a hard lesson that investors have learned over the past 12 years. Stock market investors know that it takes a 100 percent gain to recover from a 50 percent loss. Broad stock market averages fell more than 50 percent in the 2008/2009 bear market, and although stocks have more than ...

It often takes a significant amount of money to make your retirement dreams come true. Some retirees let their dreams slip away if the funds aren’t readily available or if they are concerned that their money won’t last through their retirement. Others use smart financing tools to turn their dreams into realities, just as they used smart financing to pursue the American Dream while they were working. You may have worked many years and planned to tour the country in your own RV after you stopped working. RV loans are available from major banks. These loans carry high interest rates though, some more than 7 percent, and of course require monthly payments in almost all cases. How a reverse mortgage is different from a traditional loan A reverse mortgage could also be used to fund an RV. Mo...

In June 2006, Mark Kiesel, a managing director at Pacific Investment Management Co. (PIMCO), said that, “Housing is the next NASDAQ bubble. It’s not just houses that will be for sale. You’re going to see financial assets for sale over time, and ultimately corporate bonds.” He spoke just one month before home prices in the US peaked according to the S&P/Case-Shiller Index of Values in 20 cities. Kiesel believed in his forecast so strongly that he followed his own advice and sold his home in 2006. Now he’s a buyer and recently bought a home in Newport Beach, CA, near the headquarters of the firm he works for. PIMCO manages more than $1.75 trillion in assets. The company has some of the brightest minds in finance on their team. Bill Gross, the company’s co-founder, is wide...

Inflation has been present in almost all countries for most of the last century – certainly Japan is without exception. The amount of inflation has varied, as periods of double-digit inflation briefly hit us, while slow but steady price increases are considered normal. If you look solely at official price indexes, inflation seems to be an almost unavoidable part of life in the United States. Social Security payments are indexed to these official indexes, but that offers little comfort to most retirees. How inflation is measured, and why it matters Official inflation is measured by comparing the prices paid by a family for a typical basket of goods each month. The typical basket weights the price of each item, using the percentage of income a typical family spends on each item each mo...

Home ownership is viewed as an important part of the American dream. While the specifics of the dream vary from dreamer to dreamer, it usually includes providing for your family, owning a home, and being able to retire with financial security. For generations, many have lived this dream. Now, just as many question whether all that of that is still possible, if you believe everything that you read in the newspapers. The recession that started in 2008 has impacted people all over the country and the recovery has been painfully slow for many. Real estate woes are at the center of many stories as individual tales of job losses and foreclosures are recounted. Is home ownership still a pillar of the American Dream? Foreclosures are still near record high levels and millions more are expected to ...

Financial news channel CNBC recently completed an online poll asking viewers whether or not they planned to sell their home to finance their retirement. Only 30 percent of the respondents said that selling their home was a deliberate part of their retirement planning. A majority of those participating in the survey (54 percent) said they would definitely not look at selling their home as a source of retirement funds. Some of the respondents were unsure about whether or not they would have to sell their home. In this case, most probably don’t want to sell their home, but worry about having the financial resources to stay in their home. Many retirees find that maintaining their home can be very expensive. These expenses, along with routine living expenses, could come after you see your inc...