Real Estate is a LONG TERM Investment

The new PMI report on risk factors came out recently

http://biz.yahoo.com/prnews/070619/aqtu143.html?.v=7

rating Las Vegas as having one of the highest risk factors for reduced home prices over the next two years. One of the factors used in determining the risk factors is job growth, and while we just went above the national average in unemployment, I dont think the new hotel jobs that will begin coming online in the next 8 to 12 months were factored into the report.

What the report does remind me of is that Real Estate is a LONG TERM INVESTMENT. Its one of the reasons its such a good investment. The get rich quick flip that house days are over...at least for a while, in our market anyway. By the same token, you can count on real estate eventually going up in value...its not like we have more land being magically created...unless of course you live on an active volcano...but that has its own drawbacks...like catching on fire by getting too close to the lava fields....my point is that home ownership is still an excellant long term way of getting a return on an investment.

The PMI report while confirming that the market was volitile in its expansion and is now settling back down, just means that you have to buy your home smart and choose a good loan product to do it with. The national average for a first time home buyer to live in a home is 4 to 5 years. For move up buyers is 3 to 5 years. In other words even if the market declines slightly, in 5 years that will have changed and most likely the market will have once again shifted to either an even market or back to a sellers market.

Using the right loan product is very important. Interest only loans, or less than 5 year arms are probably not a good choice right now, but interest rates are still at a historically low point and now PMI can be written off like mortgage interest on a residence, so the tax advantages are still very good.

Look the report over, but dont let it freak ya out!