To Buy, or Not to Buy?

lance_HSIt’s cold pretty much everywhere in North America – it’s even pretty cold here in Tampa, FL (if you can say that temperatures in the 60s are cold!).

Clearly, winter is finally upon us… both seasonally, and economically.

Harry has talked about this economic winter season for many years. It’s a period we’re currently in, despite the Fed’s useless attempts to keep us out of it. They’ll just never learn that you can’t mess with Mother Nature!

According to Harry, we still have a few more years until our economic winter is over. That’s why Harry rents his home here in Tampa.

And that’s why, like Harry, I’ve been renting for the last few years as well. I don’t know about him, but I’m getting tired of renting, not to mention that rent costs have been climbing sharply! So, a couple weeks ago, I started looking to buy a house. I’m in no rush to buy anything because I don’t think interest rates are going up anytime soon. But these current property prices are just crazy.

Sure, they seem to have stabilized a bit in my area – they’re not going up as fast as they were a few short months ago – but they’re still a hard pill to swallow. In fact, I asked a close friend in the area who bought three years ago and is looking to sell soon how much his home has appreciated. He told me that he is looking for a 30% gain! Not bad, even compared to the stock market.

Sure, real estate is mainly driven by local factors, something that’s very true in Tampa. Personally, though, I don’t care about school districts or living in the suburbs; I want to live where the action is! My kids are grown and I want to be near decent restaurants, fun things to do, friends and my work. No commuting, thank you!

Don’t get me wrong: I have nothing against the suburbs. I lived in one or another for most of my life. In fact, housing prices in the suburbs, at least now, are more attractive than in the city. The suburbs of Tampa were hit really hard by the downturn back in 2006, whereas the city wasn’t hit nearly as hard. According to Zillow.com, the Tampa suburb I lived in suffered more than a 40% decline in value from 2006 to the bottom in 2011, and is still down about 23%.

So while Tampa city real estate values also declined during that same time, they’ve rebounded to near pre-crash levels since then. That’s another reason I have been looking exclusively in the city. So, if there’s another downturn in real estate, I will feel a little more insulated than if I moved to the suburbs.

Like I said earlier, I don’t think rates are likely to spike anytime soon, so I’m in no rush to pull the trigger on buying a home now. I’m not saying that now is the time to buy real estate, and Harry certainly doesn’t think so. But, I am hoping to find a nice and quiet place to live in the area of my choice and to lock in these low rates when I do.

My Treasury Profits Accelerator algorithm doesn’t care what my outlook is or about my desire to buy a home again. It’s focused on one thing only: volatility in the most underappreciated-because-it’s-boring market in the world. But it’s a happy coincidence that my algorithm sees interest rates declining. That’s why my subscribers are positioned to profit from this trend and any other surprises ahead… and why I don’t have to rush to buy a house anytime soon!

Lance Gaitan

Editor, Treasury Profits Accelerator

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Today real incomes of the middle class are 5% lower than they were in 1970 and 12.4% lower than in 2000… when they peaked! How could this be?

In our new infographic What Killed the Middle Class?, we take a look at some shocking numbers to show how bad it’s become and what has been fueling this middle-class revolt.

 

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Categories: Housing Market

About Author

Lance Gaitan graduated from Franklin University in Columbus, OH with a degree in Finance. After graduating and working as an auditor for an insurance administrator as a number of years, he attained his securities license. He then went to work as a broker for a small firm and during the mid-1990’s Lance managed the futures trading desk for Piper Jaffray, a large regional brokerage firm based in Minneapolis. After migrating to Florida in early 2000, Lance founded a futures trading firm, GSV Futures, specializing in retail commodity trading strategies. Lance sold that business in 2006 and joined Harry Dent, Jr. and Rodney Johnson at Dent Research shortly thereafter.