Perspective

Lawrence Yun is the Chief Economist at the National Association of Realtors and usually brings a fairly realistic perspective to current real estate issues. Here, he helps us understand that even with the downturn in the real estate market, the leverage produced by investing in real estate is still far better than options like the stock market...
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December 1, 2007
“How much have real estate investors lost due to the housing market bust?”

That was the question posed to me by a major evening news producer, who wanted to depict the pains in the housing market during a nationally broadcast show.

Hmm. An investor who bought a property in Las Vegas five years ago would be ahead by $150,000 today. The gain would be $200,000 in Miami, and $54,000 on average in the United States as a whole.

Only people who bought in a few markets that experienced extreme overheating during the boom and who are trying to sell quickly face a potential loss. And that loss on average would be 1 percent to 2 percent.

Lenders and hedge funds with large exposure to subprime loans have lost big. Investors in homebuilder stocks also have lost.

But real estate investors who plan to hold for a reasonable period of time are doing fine.

For the entire article, please click here.