Will Long Term Home Ownership Lead to Profits or Declining Values?
9138
Finance > Personal Finance
Mar 1, 2007
Andy Goldman
Will Long Term Home Ownership Lead to Profits or Declining Values?
The latest report from PMI Mortgage Insurance company looks at real estate trends. The report indicated that if you owned a home from 1986 thru 2005 in 50 of the largest metropolitan areas, you did very well. During that period of time, if you owned a home for 10 years or more, you profited 100% of the time. If you owned a home during this period for 7 years, the percentage of homeowners that profited were 95%.
The economics now are shifting. In the top 50 metropolitan areas of the country, 48 of them face a greater chance of a price decline this quarter then they did last quarter.
PMI assigns a risk index number to differfent markets. All 50 of the major metropolitan areas, except Chicago, have seen their risk index number go up. A risk score of 500 or more means the geographic area has a high risk of price declines in the real estate market. There are now 14 of 50 areas that have a risk score of 500 or more, which means that metropolitan area has a 50% chance of price decline during the next two years. The average score has increased from 261 last quarter to 284 this quarter. The metropolitan area that saw its risk increase the greatest was Minneapolis, MN, which saw an increase in its risk index of 90 points.
Of the metropolitan areas with the highest risk, seven of top ten are in California.
The report looks at volitile markets and stable markets. First lets look at the volitile markets. These include San Francisco, CA; Los Angeles, CA; and Dallas, TX. We are looking at a time period from 1986-2005.
In San Francisco the return for any 5 year period ranged from a gain of 50% to a loss of 10%. The median return was 33%. Families staying in their homes for 15 years did not incur any losses. Their gains were from 14% to 25%.
Home buyers in Los Angeles saw the greatest losses during this time period. The median return for a 5 year period was positive at 25%, however, losses ranged up to 41% in some cases. A family that stayed in its home for 15 years in LA saw a return of 10% to 24%.
In the Dallas market trends were seen that were not seen in other markets. After 5 years of home ownership, homeowners saw their gains max out at 22%. Families who owned homes for 10 years or more did not see losses, but they did not always see gains either. During this time period gains ranged from 0% to 24%.
The stable markets looked at were Atlanta, Nashville and Cleveland. Atlanta had a median gain of 20% for 5 years of home ownership. For 15 years the gain narrowed to 11% to 15%.
In Nashville a 5 year homeownership ranged in gains from 6% to 25%. FOr 15 years of home ownership the gains were from 11% to 15%.
Home ownership in Cleveland for 5 years showed an increase from 7% to 23%. For 15 years of home ownership gains were from 12% to 15%.
The economics now are shifting. In the top 50 metropolitan areas of the country, 48 of them face a greater chance of a price decline this quarter then they did last quarter.
PMI assigns a risk index number to differfent markets. All 50 of the major metropolitan areas, except Chicago, have seen their risk index number go up. A risk score of 500 or more means the geographic area has a high risk of price declines in the real estate market. There are now 14 of 50 areas that have a risk score of 500 or more, which means that metropolitan area has a 50% chance of price decline during the next two years. The average score has increased from 261 last quarter to 284 this quarter. The metropolitan area that saw its risk increase the greatest was Minneapolis, MN, which saw an increase in its risk index of 90 points.
Of the metropolitan areas with the highest risk, seven of top ten are in California.
The report looks at volitile markets and stable markets. First lets look at the volitile markets. These include San Francisco, CA; Los Angeles, CA; and Dallas, TX. We are looking at a time period from 1986-2005.
In San Francisco the return for any 5 year period ranged from a gain of 50% to a loss of 10%. The median return was 33%. Families staying in their homes for 15 years did not incur any losses. Their gains were from 14% to 25%.
Home buyers in Los Angeles saw the greatest losses during this time period. The median return for a 5 year period was positive at 25%, however, losses ranged up to 41% in some cases. A family that stayed in its home for 15 years in LA saw a return of 10% to 24%.
In the Dallas market trends were seen that were not seen in other markets. After 5 years of home ownership, homeowners saw their gains max out at 22%. Families who owned homes for 10 years or more did not see losses, but they did not always see gains either. During this time period gains ranged from 0% to 24%.
The stable markets looked at were Atlanta, Nashville and Cleveland. Atlanta had a median gain of 20% for 5 years of home ownership. For 15 years the gain narrowed to 11% to 15%.
In Nashville a 5 year homeownership ranged in gains from 6% to 25%. FOr 15 years of home ownership the gains were from 11% to 15%.
Home ownership in Cleveland for 5 years showed an increase from 7% to 23%. For 15 years of home ownership gains were from 12% to 15%.
Content Provider: http://www.traffichelp4u.com
Andrew Goldman is president of Metal Rabbit media services, the operator of www.Exchangetradedfundinvesting.com and www.carealestateinvest.com He has written a number of articles on finance and investment over the last ten years.
Write a Review
Add to My Favorite
Refer it to Friend
Report Article
Other links owned by this user
If you are a real estate investor and missed the housing boom, you may get another chance. Overheated in the eastern and western markets are cooling off, but there are new opportunities out there. Some of the cities that sat out the boom of the last few
Category:
The latest report from PMI Mortgage Insurance company looks at real estate trends. The report indicated that if you owned a me from 1986 thru 2005 in 50 of the largest metropolitan areas, you did very well. During that period of time, if you owned a
Category:
In December of 2005, Rydex listed the Euro Currency Trust (FXE) Exchange Traded Fund. This was the first Exchange Traded Fund that allowed investors to enter the currency markets through investing in Exchange Traded nds. With the falling dollar this
Category:
Other links at Finance > Personal Finance
Budgeting, accumulating spending history and living from paycheck to paycheck are the three traditional methods of managing personal finances. None of these methods work for most people. There is a new approach.
Category:
Grandparents are generally not saving for their grandchildren's financial future, it has been suggested.
Category:
With the festive season rapidly approaching more Britons will have to consider their finances with caution, an industry expert has reported.
Category:
For many families the household budget can be an intense source of familial conflict. Not everyone always agrees with how the money should be spent or how it should be managed. More often then not the rest of the family reluctantly defers to whoever bring
Category:
Site Sponsor
Directory Statistics
Articles: 68222
Categories: 501
Yahoo Entertainment
