BUY LAND. THEY AIN’T MAKING ANY MORE OF IT
Will Rogers, world famous humorist in the twenties and thirties, said, “Buy land, they ain’t making any more of the stuff.” Land back then was “dirt” cheap, especially during the Great Depression. History repeats itself and now you have the opportunity to make it work for you. Of course, we are talking about land with a home on it.
And what better investment is there that you have ready access to? The average joe does not have money in the stock market or bond market. They may have a retirement account through their work, but that’s it. If you do not own a home you’re making someone else’s house payment. An average rent in Sonoma County of $1,300 per month adds up to $93,600 in 5 years – for someone else’s benefit.
The Median Price in Sonoma County has gone from the bottom of $305,000 in February 2009 up to $370,000 in August 2010. That was an increase of 21% in that time. 21%! The Median price has come down a bit from those more recent highs but you can see that the market here can take off! The number of foreclosures on the market in Santa Rosa has gone down from 350+ in November and December of 2008 to 60 as of last Thursday (May 5, 2011).
You know, A LOT of people made money during that Great Depression. How? They did not follow the pack. This is very hard to do. The best managers of money (Boone Pickens, Warren Buffet, and Bill Gates – for example) are a different breed of cat. They seem to operate opposite of the crowd. They buy when no one else is and they will freely tell you to do the same. It takes a brave soul to not follow the crowd.
There are statistics that show things are not as bad as they seem, and for sure not as bad as misleading headlines make it out to be. Compare the national statistics to those of Sonoma County and you should be moved to buy if you are in the market for a home at all. If the appreciation demonstrated by the increase in the median price is the same 21% for the same period of time, then we could see median home price way up in 18 months. Prices had to come down to a point where the person or household of average verifiable income could afford a home. That did occur but the bounce off the bottom has also happened – back in February 2009!
The moral of the story is – “Buy land, they ain’t making any more of the stuff.”
Forest Tardibuono is a CA DRE Broker with over 23 years experience in real estate and lending. His number is (707) 523-2099. See his website @ sunpacmortgage.com.