The Moment We've All Been Waiting For

Posted by: Chris Palmeri on December 19, 2008

An article from the January edition of Reason Magazine caught my eye the other day. It shows just how far out of whack home prices had gotten. Editor Tim Cavanaugh writes that “Comparing data from the U.S. Census Bureau and the National Association of Realtors, a house today costs four times your annual salary. Ten years ago it cost only three times as much. In 1988 it cost twice as much; in 1978, less than twice as much.”

The day before I read that I had got an email from Rob Jenson, a Realtor in Las Vegas whom I’ve found is very honest about the crummy state of the market. His email was titled “The moment we’ve all been waiting for,” and it went on to say “You can finally buy investment properties and get a Positive Return on Invesment!”

He didn’t elaborate on the math but I’m sure he’s right. Prices in Vegas have finally fallen to the point we’re buying actually makes financial sense.

Reader Comments

mark

December 19, 2008 8:21 PM

your first paragraph says homes are expensive, the next says homes are cheap enough to invest. something doesn't jive. do elaborate.

Peter

December 20, 2008 1:38 PM

"You can finally buy investment properties and get a Positive Return on Invesment!" That is not a high bar and just shows how much prices still have to fall. S&P 500 index yields 3%. $300,000 gives you $9,000 a year with no tenant hassles, no maintenance, and liquidity.

Ballbuster

December 20, 2008 3:09 PM

Once again sly Palmeri is misleading BW readers into believing now is the time to buy real estate in Las Vegas. The fact is that Las Vegas housing prices are in amidst of a death spiral due to past over-supply and speculation frenzy. Claiming "prices in Vegas have finally fallen to the point we're(sic) buying actually makes financial sense," Palmeri blindly makes this assertion in support of his E-mail buddy, Rob Jension, without requiring any mathematical foundation or its understanding. It is amazing that BW would allow Palmeri to publish such ill conceived journalism without research or cross-checking. Journalism without research and cross-checking is just garbage not worthy of wrapping spoil fish. Note in particularity Palmeri goes out of his way to qualify Rob Jenson as "very honest about the crummy state of the market." This is equivalent to a used car salesman who says, "Trust me." As an astute BW blogger once responded, even used car salesmen have higher standard than real estate agents. Apparently, Palmeri is lazy writing without doing his research or he is drinking Cool-Aide with his buddy Jenson. Either way this article shows even Rob Jenson has higher standard the Palmeri. Three words comes to mind when describing Palmeri's journalism: Expedient, exploitative, and expletive.

Brad from Australia

December 23, 2008 1:24 AM

All of the websites I have looked at just state a price for rental properties.
Can someone confirm what these rent amounts relate to. Is it $'s per week, month, per square ft.
Thanks

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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