Is Real Estate a Good Investment?
Is Real Estate Still a Good Investment?
written by Nathan Walldorf
May 23rd, 2008
There have been all sorts of reports in the national and local media lately. It has left many people’s heads spinning over the question of whether or not real estate is a good investment. I even read some article in Parade Magazine about why renting is a good idea.
The biggest problem with the hodgepodge of information that we are getting through print, TV, and radio media is the source of those stories.
What parts of the country are those stories coming from?
The 7 main areas of the country that these reports are covering are California, Florida, Colorado, Nevada, Michigan, Indiana, and Ohio. All but the Mid-Western states had runaway pricing and overbuilding issues. People had to take out goofy loans to be able to afford homes in those areas, and lenders encouraged the use of those loans. The Mid-West has suffered economic hardships as car manufacturers have cut jobs, have re-located, and as car parts production has decreased.
Every market has been affected by the media. Even though sales decreased some in 2007, Chattanooga real estate has its 3rd best year on record. Chattanooga saw a 6 month to a year slow-down in real estate due to lower consumer confidence, but 2008 started with a bang as many upper end homes went under contract and sold. When I last reported, homes from $100,000 to $300,000 were still selling well as some of the upper-end homes were selling more slowly (in the fall/winter of 2007). At the beginning of the year, much of the Lookout Mountain inventory in the $400,000 to the $1,500,000 range sold. Agents working in every part of the city have had increased sales activity in the new year.
Chattanooga earned some nice recognition from several major publications early this year. USA Today said, “Chattanooga has largely avoided the mortgage crisis...and was insulated from the worst of the national downturn, because they never experienced runaway price appreciation and real estate development in the 1st place.” 
The Christian Science Monitor predicts that Chattanooga will shrug off the major effects of the current economic downturn, because of it diverse economy. Alstom Power is expanding its production turbine manufacturing for nuclear and fossil power plants, and Volkswagen has also announced their decision to build a car manufacturing facility that will be a 1 billion dollar investment in the Chattanooga area and will bring more jobs to the area.
Forbes Magazine recently touted us a great place to live with low cost of living and beautiful scenery. 
RelocateAmerica.com has named Chattanooga as the #3 place to live after several residents nominated Chattanooga for its opportunities for raising a family and starting a business. Outside Magazine also recently named Chattanooga one of the "20 best towns in America."
Chattanooga and the surrounding area has a lot to offer, so, locally, our market is still very good. Your investment in a home in Chattanooga is very good. No one can buy a home, sell it in a year, and make money. If you stay in a home for the long haul or for a minimum of 3 to 5 years, your equity should be protected, and you will benefit from the tax advantages of home ownership. Choose the area where you buy wisely and use and agent who will thoroughly watch out for your best interests to make sure that you are getting a good value. Feel free to call Nathan Walldorf for you home buying needs and call the Walldorf Father Son Team to sell your home. We’ll give you 80 years of experience in the Chattanooga Real Estate market.
To conclude this article, Lawrence Yun (the NAR chief economist) shows that buying a home is still an excellent investment in the following words spoken at the NAR national convention:“Homeownership is not a quick in and out purchase like stocks. Wealth is built over the long term, which is one reason why home buying is heavily subsidized by tax savings and generous loan programs that enable people to get into homes without large down payments. Stocks and houses are not the same. Over 10 years, a $10,000 investment in the stock market at a normal 10% market rate of return would yield nearly $24,000. The same investment as a down payment on a $200,000 home at a normal appreciation rate of 5% would return nearly 5 times the stock market return, or over $110,000.” Homeownership is still a great investment, and we would love to have the honor to help you find a new home.
Nathan Walldorf 423-544-7700
Feel free to visit "Local Resources" and look for the header "Chattanooga Real Estate Market Update" for more links to current market news.
The Chattanooga Association of Realtors (CAR) roles out a new informational web-site about the Chattanooga real estate market called RightTimeRightMarket.com. See what CAR has to say about Chattanooga's real estate market.
