“Go Ahead And Back Up”! Does Anyone Really Believe That The American Real Estate Market Is Recovering?

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We continually see headlines saying “Home Prices Up” (“CNBC” July 29, 2015) while other media outlets pronounce “strong housing on verge of reversal” (“Redfin July 29, 2015”), while I see on the same day “US Home Ownership Rate Falls to lowest since 1967” (“CNBC July 29, 2015”).

So, the logical question is “Go Ahead”, “Back Up” or “Go ahead and back up“?

These three contradictory news bulletins from the same “credible” media source do precious little to tell us if the American real estate market is actually on the rebound or not.

And then, if this wasn’t confusing enough, the same media outlet (“CNBC”) on the same day announces “Home Price Growth Stalls“!

The logical question is “if home ownership rate falls to the lowest in 48 years, who exactly is buying all these homes“?

And, if Redfin is reporting accurately, when it says “strong housing on verge of reversal”, is Redfin saying that all these non-end-user buyers are drying up?

My personal hobby is studying various real estate markets from Canada, through the U.S.A., to Mexico, South and Central America, and the Caribbean.  The thing that actually staggers me is the physical amount of unsold properties languishing in global markets.

The significant flashpoint in all of this is this massive inventory with end-user ownership, as opposed to institutional owners, speculators, foreign investors, hedge funds, vulture funds, entrepreneurs, fix and flip guys, tearing around out there, is there such a thing as “meaningful data“?

For example, homeownership in the U.S.A., peaked at 69.2% at the end of 2004, amidst an American the real estate boom before the storm. The 50-year average is 65.3%.  Coming in at 63.4% reflects a full 10% drop!

I can’t help but wonder about the economic viability of a strategy to just keep on building new residential units with these seemingly ever increasing inventories of home available.

The U.S. is clawing its way out of the single most significant real estate set back in history!  In 2008 the American real estate industry (and economy) was in “free-fall“.

Thanks to a seriously materially flawed financial scheme called “Sub-Prime Mortgaging” where financial institutions concocted a program through which anyone who couldn’t afford to buy a property was now able to do just that.

Consumers got sucked into an “easy money” shell game scheme similar to “three card monty“.  Anyone could get a mortgage!  Corrupt mortgage lenders were photocopying application approvals with absolutely no oversight or proof of the financial means to carry the loan!

The taxpayers were required to bail out the offending financial institutions in concert with the Wall Street Brokers who walked away with tens, if not hundreds of millions personally after manifesting their “derivatives programs” to the tune of “billions“!

I just sold my U.S. property and am not interested in looking further at the American market.  I have found a safe and secure area in Mexico where I am intending to invest and for you investors out there, you may want to take note as I’ve studied everywhere, trying to find a place to make my own personal investments.

Investing is challenging, especially these days when all investors really have to rely on seems to be the “media” and as today’s headlines (above) show, it seems that every possible side of every argument regarding investing in real estate is presented every day in the media, contradicting each other’s analysis.

Investing in real estate is the most secure and safe investment in the world, providing you can make your own “informed” decisions but the only way that you can form your own decisions is to actually be in the market.

I’ve spent the past three years since concluding that the Toronto market was simply not worth it, studying every conceivable investment opportunity out there and I’ve come up with a small area in Mexico that not only delivers sound real estate opportunities, but which round out my “retirement investment strategy” which balances, “quality of life” aspirations with financial need to have money working for you throughout you retirement years.

If you are investing already and you have not documented your strategic “Plan“, or if you are contemplating jumping into this complex and risky “game” of investing in real estate and you don’t have a concrete “Plan“, then I would recommend that you stop right now and develop one!

It is really easier than you would think.  Take your age now, and project into the future to the time when you should be in a position to retire.   The time to do this is when you are a young as possible but most of us don’t catch on to the necessity of taking care of ourselves long term until late in life.

Where would you like to be when you are retired.  With me it has always been in a hot climate.  I chose Florida but grew dizzy trying to deal with the people!  They may look like us Canadians, but I can tell you first hand, they are not like us at all!

I’m not here to dump on Americans, but their political radicalism, insistence on carrying hand-guns, laws regarding ‘Stand your Ground“, to mention but a couple of the plethora of issues that cause me concern, led me to look elsewhere.

I will rent in this tiny oasis that I’ve discovered.  It has its own fair sized city with lots to do, yet walking distance to beautiful white sandy beaches.  There is an abundance of gated properties and condos for sale and the flight is just 3 hours (the same as to Fort Lauderdale) from Toronto.

With Toronto’s harsh and long winters, its residents should factor in a winter residence in their retirement.  The time to implement the building success of your strategy should start when you are young.

Unless you are planning to not be old for long, a sound investment strategy that includes your retirement lifestyle should prove a cornerstone of your investment strategy.

With exchange rates on the greenback approaching 30% over the Canadian dollar these days, investing in Mexican properties (based on U.S.$) carries a price burden but that applies anywhere in the world today.  Properties are traded in U.S. Dollars, at least until China makes its move in currency markets.

I’m Charles

 

First Service Residential

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