Phil Cannella Talks Housing on the Crash Proof Retirement Show®

Phil Cannella and Joann Small welcomed Real Estate Expert Sal Palantino to the show to speak to our listeners on the current housing market in America.

Sal Palantino is also a proud Crash Proof consumer and has been educated through the Crash Proof Educational Process provided by First Senior Financial Group.

Together, Phil Cannella, Joann Small and Sal Palantino discussed some very important topics regarding the health of the housing market in the United States.
Below is a review of some of the discussion heard from this weekend’s show:

Talking points on the Housing Recovery

The Census Bureau and the Bureau of Labor Statistics released housing data from January showing that the housing market may be in trouble.

On a seasonally-adjusted basis, only 880,000 new homes had begun construction in January. That is 16% below what experts were expecting from the housing market.

Housing prices are still down nearly 21% from their peak, set in the second quarter of 2006.

U.S. gross domestic product (or GDP) — the broadest measure of economic activity — grew at an annual rate of 2.4% in the fourth quarter of 2013. That was weaker than previously estimated and marked a slowdown from the third quarter.

Many experts claim that the rise in housing in 2013 was due to wealthy investors buying up homes at a discounted rate and offering them up for rent.

The top 10% of America’s wealthiest communities own more than six times as much value in the housing market than in the bottom 40%, a new survey has found. There are less homeowners than we thought.

Was the housing decline due to bad weather?

Jed Kolko, chief economist at real estate site, Trulia, has found that while January was cold, it wasn’t one for the record books, as places like New York experienced colder Januaries in 2003, 2004, and 2009. He also found that most of the real estate activity in the U.S. takes place in parts of the country that were largely unaffected by severe weather.

New Study Predicts Housing Will Be Slow over Next 5 Years

The Demand Institute, a non-advocacy, non-profit organization that focuses on consumer demand research, recently published a 96-page report detailing the importance of housing for the American people.

The Study found:

• Double-digit increases in the price of U.S. homes in the past two years are not indicative of future trends. They were largely driven by investors buying up swaths of distressed homes via short sales to meet growing rental demand.
• Over the next five years, home prices will accordingly grow at a much slower rate.
• There will be significant variations among all 50 states and the largest 50 metropolitan areas in the next five years. Price rises will be more than three times greater in the strongest markets than in the weakest ones. 

Can the Housing Market be in another bubble?

In 2013, home prices jumped from a 1.1% increase in the first quarter of to a staggering 7.2 % increase in the second quarter.

Has this dramatic increase in 2013 placed the housing market back into another bubble?

The Federal Reserve has hinted that they may start raising interest rates later this year. How will this impact the housing market? How will it impact the economy as a whole?

Higher interest rates = More money for banks.

More money for banks = More loans for housing.
Is Downsizing Your Home in Retirement a Good Financial Strategy?

2014 is a great year for mortgage rates (historic lows)

­   Since the 1940s, the average mortgage rate has been 6.5%. It is currently at 4.3%

Home prices are expected to grow at a slower rate over the next 5 years, making a new home purchase a risky investment.

Financial Study Shows that a Majority of Financial Advisors Avoid Educating Consumers about the Benefits of Alternative Investment Products

Don’t forget to tune in next week as the Crash Proof Retirement™ Team discusses the crisis in Ukraine and what it could mean for your retirement future.