Almost every day I am asked what is going to happen in the future. If I buy a house today will it go up or down in price.
So, I study the local real estate market. I read a lot about the state, national, and local economy. I talk to lots of people and listen to their opinions and news about the economy.
Here are a few of the places I go to get an overview:
I also get the weekly mortgage update courtesy of Alice Roe of US Bank, and the weekly E Letter from John Mauldin of Frontline Thoughts.
After reading all these reports from people who make a living predicting the future economy, and listening to many opinions from people “in the know” my conclusion is this: I don’t have a clue what is going to happen.
Some people think the “stimulus package” put forward by the government is going to cause inflation which will increase interest rates and also decrease the value of money which will inflate the price of homes.
Others think this will be a short term increase which will crash in about 2 years. Then I read other reports which indicate that demand world wide is decreasing which will hold down inflation and perhaps even cause a depression. That will tend to deflate the value of homes. When I read those reports they make sense…until I read the next one with a differing opinion.
What they all seem to agree on is that things will turn around, in a year, two years, maybe 5 or 10 years. So thats the good news. Its just a matter of when.
I recently had someone purchase a home and ask me the question that started this post. I asked them how long they planned to stay in their home and they said probably 10-15 years at least. That makes me comfortable. Over that long a time the chances are that the home will be a very good investment.
In the short run all I can say is that the interest rates are at historic lows, Alaska’s real estate market is still relatively stable as shown by this recent Alaska Journal article, and housing provides one of our basic needs…shelter. We all need a place to stay warm and dry. You can rent your shelter or you can buy your shelter, its your choice. There are good reasons to do both and the decision will ultimately be based on what best fits the needs of you and your family.
If you would like more specifics on this subject or have specific real estate questions contact me by filling out this form: :
