“CAPITAL INSIGHTS” with Jack Kern
- Sep 04, 2008
Now is the best time to – well, wait.
You’ve probably seen the ads from the realtors talking about how now is a fabulous time to invest in real estate and it never rains on a real estate investment and gosh golly, buying a home is a great experience. Maybe they see something I don’t because according to recently released data from their own research department at the National Association of Realtors, through July, 2008, on a year over year basis, the median price of a single family home declined 7.7%, and the median price of a condo/co-op declined 2.7%.
I’m not sure that following the trendline here will impress prospective buyers of homes. Actual changes in the median price of single family homes, according to NAR data show that single family homes have gone from $219,000 in 2005 to $210,900 as of July, 2008. Not exactly an investment you’d recommend. Condo/co-op data show the median in 2005, at $223,900 end up at $223,400 in July, 2008. Investing in, well almost anything else would have done better over that time frame.
It gets really interesting when you look at the average prices. For single family homes, in 2005 the average was $267,400, while the reported average home price in July, 2008 was $252,900. I have to admit, I just smile when I see the ads for buying homes. While rents have been up and down all over the place, depending on markets, this great American Home Ownership debacle has been pretty much a loss leader just about everyplace. The best that we can hope for is that the rest of the way to bottom won’t get much worse.