Perspective on the Housing Market

We can’t escape it.  Every time you turn on the television or read a paper, you are slammed with how terrible the housing market is.  Well, it’s true, but it’s not entirely true.  Sure enough, there are many people suffering greatly.  They can’t make their mortgage payments, their house goes into a short sale or maybe even gets forclosed on.However, that isn’t the whole story. Prices in good neighborhoods are declining, but they are not plummeting.  If you are looking for a nice house to buy in a nice part of town,  most likely you are not coming across a tremendous amount of bargains.  As a matter of fact, in the ‘best’ part of most American towns, prices are still increasing (not tremendously, but thats not the point).I was reading an article in MSN money today, and I came across this quote: “Despite rising foreclosures and skittish buyers, housing demand continues to grow every year through the creation of new households, whether from children moving out on their own, new couples getting together or couples splitting up. With current level of 111 million U.S. households growing by about 1 percent a year, new households will absorb about 1.1 million housing units a year, according to RDQ Economist chief economist John Ryding.”    The article went on to mention that 1.1 million was approximately the inventory of unsold houses in the US. What this tells me is that there ARE buyers looking for houses.  You’d get the impression from the media that no-one is buying a house these days.The bottom line is that people have to have a place to live.  You can either rent or own, but everyone needs a place. A few years ago, people who owned rental property were having trouble renting them, because everybody was buying their own home.  Nobody wanted to rent.  Now, its the opposite. But the way it has always been, and the way it will always be is that if you want to accumulate wealth over the long term,  you need to own property, including rental property.   The key is, though, you need to do it right.  You can’t just buy any old place and think you’re going to strike it rich.  That is what happened in the last few years and for that reason a lot of people are suffering.