Linked here is an article about some of the worst housing markets in the US. According to the article, housing recovery is going to be a very long and slow process due to a number of factors. Four of the eight listed are on the west coast, Nevada, California, Arizona, and Oregon. One factor not mentioned in the article is the how the speculation on housing prices was a huge player in the precipitous drop in the value of the home. Many people purchased homes in this region to speculate on the value continuing to rise and when the bubble burst, there was nowhere to go but down and down fast.
I have always been a tad skeptical about purchasing a house as an investment. You buy a home at $200K, and by the time you are finished, you have paid over $400K over the life of the loan (30-year fixed). Unless the house doubles in price over that 30 year period, I don’t see how it is a great investment. If the value grows slow and steady, then it probably works out OK. But this whole deal in these states with 15-20% annual increases, fueling by questionable support from the feds, was a disaster waiting to happen. Now many homeowners will pay a huge price for this rampant, ill-advised speculation.
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