Market News & Commentary by Chris McLaughlin, January 26, 2009
http://www.shortsalesriches.com/welcome.html
——
It really isn’t as difficult as you might think it is … but it all starts with TAKING ACTION. If you want something that you never had, you need to do something that you’ve never done, right? So forget all the negativity, and forget all the turmoil. More millionaires are created during times like these than any other time … so are you ready to make it happen? If so, be one of the 40 spots that we have left for our Tuesday webinar at 8:30 PM EST / 5:30 PM PST entitled “Recession Proof Real Estate Investing: How to Buy Property with no out of pocket costs!”
The link is right here, so jump on this now:
https://www2.gotomeeting.com/register/323668815
———
In real estate related market news today…
The National Association of Realtors reported that existing home sales jumped 6.5% to a seasonally adjusted annual rate of 4.74 million units in December versus November’s seasonally adjusted 4.45 million units. The results are still 3.5% below the 4.91 million units in December 2007. The year over year period was not as kind, however.
For all of 2008 there were 4,912,000 million existing home sales compared to 5,652,000 sales in 2007, a decline of 13.1%.
Lawrence Yun, NAR chief economist, said home prices continue to drop. “It appears some buyers are taking advantage of much lower home prices,” he said. “The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future.”
In other positive news, housing inventory dropped 11.7 percent to 3.68 million existing homes, representing a 9.3 month supply, which is down from an 11.2 month supply in November. The national median home price in December was 175,400, which is 15.3% lower than December 2007’s $207,000.
And if you saw our blistering report on former Merrill Lynch CEO John Thain’s spending spree (he spent over $1.2 million on his office renovation last year), you’ll be glad to know that Mr. Thain stepped forward today and said he’ll personally pick up the tab. Thain said it was a mistake “in light of the world we live in today” and that the renovations, which were incurred in early 2008, were “in a very different environment.” Thain also said that the media was mistaken about Merrill Lynch’s bonuses, which he claims were 41% lower than 2007.
Now, on to our real estate investing section…
What’s Better – Silver or Short Sales?
When it comes to investing in alternatives designed to “hedge” your risk against the market, silver is a popular choice especially among many contrarian investors. Considered the “poor man’s” precious metal investment, silver has a long history of being used both as money and as an industrial metal. It’s also portable, easily liquidated and easy to store…but is it a solid investment? Given the choice, where would one rather invest their hard earned cash…short sales or silver? Let’s take a look and consider the evidence for and against each.
Common wisdom holds that both real estate and silver provide important protection against inflation…while it may be true that silver reached a high in excess of $50 (not adjusted for inflation) after the inflationary era of the 70’s, in large part it was due to a major move by the Hunt brothers in an attempt to dominate the market. Once that episode was put to rest via legislative intervention, silver experienced a continuous decline for the next 30 years…reaching a low of approximately $2.50 – NOT adjusted for inflation! Clearly, anyone holding silver and was forced to liquidate during that period of time would have lost money…in fact, silver recently reached a high of $21 during 2008 only to drop by over 40 percent just months later. However, silver requires no maintenance, upkeep, taxes or insurance to support so buyers can hold it for years without experiencing high transactions or holding fees.
On the other hand, real estate has also been considered a long term hedge against rising rates of inflation. While real estate does require maintenance, insurance and property taxes to be paid on an annual basis it is also possible to offset or support the property through income generating activities such as rentals – without having to liquidate the property itself. While real estate also experienced major gains during the inflationary era of the 70’s…and a corresponding drop in many areas of the nation during the early 80’s…the majority of real estate holdings held their own during the interim years.
To compare silver against short sales, let’s take a long term outlook of what would have happened to $100,000 invested into each during 1980…
Average price of silver in 1980 was $48 which would purchase 2,083 ounces of silver. Today, the price of silver…NOT adjusted for inflation…is $11.30. That same 2,083 ounces of silver would be worth $23,538. Adjusted for 29 years of inflation and the actual purchasing power would be substantially less. Clearly the silver investor would not be pleased by the ‘hedge’ provided by silver.
Now let’s take a look at $100,000 invested in real estate during 1980. The average cost of a brand new home was $68,700 so you could have purchased 1.5 new homes or approximately 2 average sized re-sale homes. Even accounting for the dramatic declines in housing prices experienced throughout 2008, the average cost of a home still stands at roughly $180,000 or nearly 3x’s the original selling price of a home. Take time to calculate the numbers for yourself; any way you work it, short sales come out on top. Decide for yourself which is the wisest path to profit for the coming years: silver or short sales? Remember, all that glitters isn’t gold or silver…sometimes it’s real estate.
See you at the top!
Chris McLaughlin
http://www.shortsalesriches.com/welcome.html
P.S.: It really isn’t as difficult as you might think it is … but it all starts with TAKING ACTION. If you want something that you never had, you need to do something that you’ve never done, right? So forget all the negativity, and forget all the turmoil. More millionaires are created during times like these than any other time … so are you ready to make it happen? If so, be one of the 40 spots that we have left for our Tuesday webinar at 8:30 PM EST / 5:30 PM PST entitled “Recession Proof Real Estate Investing: How to Buy Property with no out of pocket costs!”
The link is right here, so jump on this now:
https://www2.gotomeeting.com/register/323668815
Copyright Loss Mitigation Institute 2009.
All Rights Reserved.
http://www.shortsalescoach.com
http://www.shortsalesriches.com
http://www.sevenfigurereo.com (sold out!)
http://www.youtube.com/shortsalesriches
*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog
*************************************************
About the author:
Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.
* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid flipping of distressed homes. Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner and Supervising Broker of one of Florida’s
largest Real Estate firms, running 5 different
offices, supporting nearly 500 agents, uniquely
positioning him to help thousands of investors
make money in the biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
—
{ 0 comments… add one now }
Leave a Comment