Homestead mailing list

[Gene GeRue <genegerue AT ruralize.com>]

> How many people can afford to pay a half million dollars for a house?

Lots of people. I am continually impressed by the fact that there are 
thousands of people here in Phoenix who not only can pay a half million or 
more for a house but often do so for cash. My latest and greatest home sale 
so far will close in a few days for 725,000. The buyers are a fortyish 
couple who work hard in their own business, which among other contracts 
provides training software for the U.S. Army through a prime contractor.

One of the motivations leading to the homestead life is the ability to live 
on a much lower income than in cities. So some homesteaders tend to forget 
how much money urbanites make. How about your children? I bet several of 
them can afford homes in this price range.

The typical scenario in house investment is that most young people start 
modestly, fix up and improve, sell, and invest the profit in something more 
expensive that they can now afford with rising wages as they gain age and 
experience. The average cycle is now five years. California is a classic 
example of this pattern, and where it has been happening for the last 
thirty-five years. With the wonderful tax law now allowing a single to gain 
250,000 profit or a couple to gain 500,000 profit tax-free after two years 
residency, there are many people who work this system as they do any job. 
Serious money has been and will be made.

There are always business ups and downs. As for the right time to buy or 
sell, the challenges are much the same no matter the price range. They are 
also similar in stock investments. The unassailable fact about real estate 
is that everyone needs it.