Thursday, June 16, 2005

"Bubble-Proof"?

Nationally, home values increased by about 14 percent last year nearly doubling 2003's 8 percent-- the year that talk of a "bubble" commenced in earnest. In mostly coastal areas, prices are up 20 percent, maybe more, putting homes out of reach for many median-income families. Is there a bubble or just bubbling? Is it just some new hobby called, "House Crazy"?

"House Crazy" evidence? What are all those home-remodeling shows telling us? Are today's house "flippers" yesterday's day-traders? Is it all the inexpensive home/house/garden accessories coming to us courtesy of China urging us to expand and decorate our nests and maybe add another nest somewhere else? How about all the new enticing mortgage products that allow you to stretch your home-buying dollar? It seems as though everything is pointing us in the direction of a new home; but are all these simply pressurizing a "bubble"? We don't think so, and there are many economists who agree.

Granted, some real estate speculators may be heading for trouble; but for the sensible individuals, putting money into a home can still be one of the best moves you'll ever make. The key is "sensible". The second key is "think longterm". Delay or ignore instant gratification and think about the future. After all, you don't worry over whether the value of your car is going up yearly, do you? No. Thinking of your home in a similar way eases "bubble" fears.

Outside the "glamour area" cities, there's very little to fear about bursting bubbles. If the bubble bursts, you may not even hear it-- especially here in the White Mountains of Arizona, always a desirable place to live, either full-time or for your vacation home. Steadily increasing property values, reasonable and leisurely growth-- sure doesn't seem like a bubble machine!

So, if you've got some equity, it's still a great time to buy that second home here in the White Mountains of Arizona. Forget about the raw consumption of glamour vacations, (short-lived and very expensive) and think instead about a lifetime vacation AND a great investment with your very own White Mountains home. Enjoy it now and watch your investment grow, too!