Chitownproperty

You may have noticed the recent rash of news articles and television segments about the real estate ?¢‚Ǩ?ìboom,?¢‚Ǩ¬ù and corresponding fears that it may soon turn into a bust. The current enthusiasm for the investment potential of real estate recalls the excitement about the stock market in the late 1990s. Housing prices have skyrocketed in some parts of the country, particularly coastal areas like California, Florida, and New York. In Los Angeles, for example, the average home price has risen almost 26% in the last year. But we all know how the Great Internet Boom of the 90s ended. Is a similar correction of the real estate market inevitable?

An article in the June issue of Money Magazine by Pat Regnier addresses this question. Regnier reports that industry experts Case Shiller Weiss (CSW) predict that the pace of home value appreciation will slow in the next year. Prices may even decline in the hottest markets on the coasts. Interest rates are still near a historical low, and the inevitable rate increase means that fewer consumers will be able to afford homes. Despite the expected decrease in demand, housing prices nationwide are still expected to increase an average of 7% through June 2006. While that may not be the rate of return that can make you rich in one real estate deal, it certainly doesn?¢‚Ǩ‚Ñ¢t approach the devastating losses some people suffered in the stock market a few years ago.

The Chicago market is expected to outpace the national average and grow 8.6% over the next year. CSW considers Chicago a low risk because prices here have maintained a steady but controlled growth in the past 25 years. Unlike those in California or Florida, Chicago homebuyers don?¢‚Ǩ‚Ñ¢t have to worry about paying vastly inflated prices that may or may not hold up as the market slows. Plus, the city?¢‚Ǩ‚Ñ¢s economy is diverse enough that its job market, and in turn its housing demand, is not subject to the fortunes of any particular industry. Buying a home in the Windy City is still a good investment.

Even in the worst markets when home prices actually decline, homeowners can cope in a novel way: by simply continuing to live in their houses until prices rebound. The ?¢‚Ǩ?ìcrash?¢‚Ǩ¬ù is only a paper loss unless you must sell your house during the downturn. In the meantime, you still get to use your property for its intended purpose, that is, a place to live in and enjoy instead of a product to buy and sell. As Regnier says, ?¢‚Ǩ?ìThe more you treat your house like a home, the less you need to worry about bubble talk.?¢‚Ǩ¬ù Maximizing your investment in real estate is important, but not as important as finding a home you love. And today in Chicago, you can accomplish both.