IrvineRenter_IHB
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A reader sent me an email with this attachment:
2007 Mid- Year Real Estate Update by Gary Watts
<p class="MsoNormal">June 22, 2007</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal"> </p>
<p class="MsoNormal" style="margin-bottom: 12pt;"><strong>I. Three Decades of Real Estate</strong></p>
<p class="MsoNormal">A. It was 36 years ago, after graduating with a degree in Economics and advanced studies in psychology, that I landed a job (during a recession) as a salesman at a television and appliance store in a new community called El Toro. California. One Saturday morning, a real estate agent "floated" into the store. I asked him why he was so happy. He replied, "Yesterday I closed my biggest deal ever. I sold an oceanfront home in San Clemente for $28,000!</p>
<p class="MsoNormal" style="margin-left: 0.5in;">1. Loans were at 7% that year. Today they are 6.33%. I have seen 3 recessions, 3 recoveries and a year when lenders had absolutely no money to lend. I have seen an inflation rate of 21%, home loans at 18% and worked through a 15 year period of double-digit interest rates for home loans. Today, we are within 1 % of a 40-year low for home loans.</p>
<p class="MsoNormal" style="margin-left: 0.5in;">2. Before beginning my career in real estate, the experts like those in Business Week in 1969 said: "The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000."</p>
<p class="MsoNormal" style="margin-left: 0.5in;"> 3. Six years after getting into the business (1977), National Business magazine said: "The median price of a home today is approaching $50,000 ... housing experts predict price rises in the future won't be that great."</p>
<p class="MsoNormal" style="margin-left: 0.5in;">4. I remember in the early 80's a seller telling me that he had owned a lot of real estate for a long time but the glory days were over and we would never see price increases like in the past. Maybe he was reading Money Magazine in 1985 when they reported: "The golden-age of risk free run-ups in home prices is gone."</p>
<p class="MsoNormal" style="margin-left: 0.5in;">5. MY all-time favorite was when the San Francisco Examiner said in 1996: "A home is where the bad investment is."</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal"><strong>B. Since the Early 1990's</strong></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal" style="margin-left: 0.5in;">1. The early 90's was the only time in my 36 years that the median home price here in Orange County declined. Over those 6 years, the median home price declined 19.33% or a yearly decline of only 3.22%.</p>
<p class="MsoNormal" style="margin-left: 0.5in;"> 2. However, it only took the following two years to erase almost the entire loss, and before the decade ended, real estate had gone up 37.26% - almost twice the decline of the previous 6 years!</p>
<p class="MsoNormal" style="margin-left: 0.5in;"> 3. Since 2000, homes have appreciated over 100%!</p>
<p class="MsoNormal" style="margin-left: 0.5in;"> 4. If I add up the appreciation rates for each of the 4 decades here in</p>
<p class="MsoNormal" style="margin-left: 0.5in;">Orange County, the 37-year average comes to 14.9% yearly!</p>
2007 Mid- Year Real Estate Update by Gary Watts
<p class="MsoNormal">June 22, 2007</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal"> </p>
<p class="MsoNormal" style="margin-bottom: 12pt;"><strong>I. Three Decades of Real Estate</strong></p>
<p class="MsoNormal">A. It was 36 years ago, after graduating with a degree in Economics and advanced studies in psychology, that I landed a job (during a recession) as a salesman at a television and appliance store in a new community called El Toro. California. One Saturday morning, a real estate agent "floated" into the store. I asked him why he was so happy. He replied, "Yesterday I closed my biggest deal ever. I sold an oceanfront home in San Clemente for $28,000!</p>
<p class="MsoNormal" style="margin-left: 0.5in;">1. Loans were at 7% that year. Today they are 6.33%. I have seen 3 recessions, 3 recoveries and a year when lenders had absolutely no money to lend. I have seen an inflation rate of 21%, home loans at 18% and worked through a 15 year period of double-digit interest rates for home loans. Today, we are within 1 % of a 40-year low for home loans.</p>
<p class="MsoNormal" style="margin-left: 0.5in;">2. Before beginning my career in real estate, the experts like those in Business Week in 1969 said: "The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000."</p>
<p class="MsoNormal" style="margin-left: 0.5in;"> 3. Six years after getting into the business (1977), National Business magazine said: "The median price of a home today is approaching $50,000 ... housing experts predict price rises in the future won't be that great."</p>
<p class="MsoNormal" style="margin-left: 0.5in;">4. I remember in the early 80's a seller telling me that he had owned a lot of real estate for a long time but the glory days were over and we would never see price increases like in the past. Maybe he was reading Money Magazine in 1985 when they reported: "The golden-age of risk free run-ups in home prices is gone."</p>
<p class="MsoNormal" style="margin-left: 0.5in;">5. MY all-time favorite was when the San Francisco Examiner said in 1996: "A home is where the bad investment is."</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal"><strong>B. Since the Early 1990's</strong></p>
<p class="MsoNormal"> </p>
<p class="MsoNormal" style="margin-left: 0.5in;">1. The early 90's was the only time in my 36 years that the median home price here in Orange County declined. Over those 6 years, the median home price declined 19.33% or a yearly decline of only 3.22%.</p>
<p class="MsoNormal" style="margin-left: 0.5in;"> 2. However, it only took the following two years to erase almost the entire loss, and before the decade ended, real estate had gone up 37.26% - almost twice the decline of the previous 6 years!</p>
<p class="MsoNormal" style="margin-left: 0.5in;"> 3. Since 2000, homes have appreciated over 100%!</p>
<p class="MsoNormal" style="margin-left: 0.5in;"> 4. If I add up the appreciation rates for each of the 4 decades here in</p>
<p class="MsoNormal" style="margin-left: 0.5in;">Orange County, the 37-year average comes to 14.9% yearly!</p>