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homestead - Re: [Homestead] The lull before the real estate storm

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  • From: Gene GeRue <genegerue AT ruralize.com>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] The lull before the real estate storm
  • Date: Wed, 26 Jan 2005 10:52:34 -0700


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.







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