U.S. Housing Market Is The Most Awesome Opportunity In American History

TMO ^ | 9-9-2012 | Daily Wealth

[blam]

U.S. Housing Market Is The Most Awesome Opportunity In American History

Housing-Market / US Housing
Sep 09, 2012 - 11:14 AM
By: DailyWealth

Dr. Steve Sjuggerud writes: The situation we're facing today can be boiled down to a few very simple points... And the result is an awesome investment opportunity.

It is possibly the greatest investing opportunity in American history...

I'm talking about the housing market.

Real estate investor Jason Hartman interviewed me this week on his radio show (available soon at www.JasonHartman.com). And I made my case.

My points were simple:

1. Housing prices have fallen more than they ever have in our lifetimes – by far. Today, houses are selling for well below replacement cost.

2. Meanwhile... housing prices are up for five-straight months. It sure seems like they've bottomed.

3. Mortgage rates are at record-lows – around 3.5% today. With low home prices and low interest rates, houses are more affordable than ever. But the story gets better...

You have a huge "tailwind" for rising prices, courtesy of the government.

First, Federal Reserve Chairman Ben Bernanke will not raise rates for years.

You see, he will only raise interest rates when inflation gets too high or when the economy is booming (specifically, when the unemployment rate falls too far). We are not in danger of either of those things happening right now – and we won't be in danger for a couple years.

So interest rates will stay low for longer than anyone can imagine... And these record-low interest rates should be like lighter fluid on a fire. It's taken a while to get started... But with higher home prices over the last five months, the fire is now lit.

Second, I can't think of an asset that has more government incentives than the home you live in.

Let me show you what I mean...

You can deduct the interest on your mortgage off your taxes. You get to keep up to $500,000 in capital gains on your home without having to pay any capital gains taxes. And on roughly 90% of home loans, the government has literally made those loans possible (through government-sponsored entities like Fannie Mae and Freddie Mac).

In short, the government wants you to own a home... This is simply adding more fuel to the fire.

And for most regular folks, your home is a much better use of your savings than stashing your money in stocks...

Buy what you understand. When you own a home, you know what you've got – the earth under your feet isn't going out of business. But you could easily buy shares of a company that goes out of business. So today, I suggest putting your savings into your primary residence.

In sum, I believe that starting today, single-family home prices will soar higher than anyone can imagine in the next couple years.

The gains in housing prices will surprise everyone – and you certainly haven't missed it yet. This trend is just beginning. And it will last for years to come.

I believe we have the most awesome opportunity in American history in single-family homes – right now. Do your best to take advantage of it...

[whattajoke]

3.8% tax going to zerocare starting January 1st. That’s $3800 of your money per 100K going to his ‘free healthcare’.

No. There are enough terrible things in the act to get upset about so there is no need to promote things that aren't. Like this.

[DManA]

No, the author says real estate is a great INVESTMENT.

You are talking about a life style choice. Owning a house could (and usually is) a money losing proposition but still worth it if it makes your life better and you can afford it.

[whattajoke]

Housing prices will not recover their value in real terms for at least 70 years, if ever.

That's a bold statement. While this may be true is some parts of the country, it's not at all in others. Be smart. Buy smart. Stay smart. I bought my house in 2005 ($5K above list) and am 100% confident that if I were to sell it tomorrow, I'd get at least 15% more than I paid.

[whattajoke]

Let’s all remember that for many, we don’t actually “own” our houses for 15-30 years and even then, we’re pretty much just squatting on government land in the end.

[Kirkwood]

There is a difference between buying a single home to live in and buying multiple houses as a speculative investment for the future.

[blam]

" The sneaky new program to sell foreclosed properties in bulk to institutional investors got my attention earlier."

Thanks for the reminder.
I'd forgotten about that one. That's the crony billionaire investment club, eh? Only billionaires need apply for these government (give-aways) sales...If I recall correctly.

[blam]

"There is a difference between buying a single home to live in and buying multiple houses as a speculative investment for the future."

Yup.

Don't pay your property taxes and see who shows up to claim THEIR property.

[ilovesarah2012]

When Romney is elected, home prices will go up immediately, IMHO.

[oblomov]

>> I bought my house in 2005 ($5K above list) and am 100% confident that if I were to sell it tomorrow, I’d get at least 15% more than I paid.

I don’t doubt that you are correct, but a 15% gain from 2005 would still be a loss in real terms, especially when CPI book-cooking is taken into account.

There are undoubtedly local exceptions to this, but I think the era of positive real returns from housing real estate is over.