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E M A I L U S AT N E W S T I P S @ A R I Z O N A R E P U B L I C . C O M O R C A L L U S AT 6 0 2 - 4 4 4 - N E W S ( 6 3 9 7 )
CATHERINE REAGOR
Are you buying a house or lottery ticket? Don’t expect a home to fund your retirement LIZ WESTON NERDWALLET
The same week legendary investor Warren Buffett put his California vacation house on the market, a friend told me her widowed mother had sold the family home in Cleveland. Buffett bought his Laguna Beach place in 1971 for $150,000 and is asking $11 million . My friend’s parents bought their home for $24,500 in 1965 and just sold it for $104,000. Put another way: If Buffett gets his asking price, his house will have appreciated at an annual rate of 9.79 percent. The Cleveland house eked out a 2.82 percent annual return. Neither buyer could have predicted what their homes would be worth now. One could score a healthy return, while the other didn’t even keep up with inflation. If it had, her home would have been worth about $190,000. Homes are a big part of most Americans’ net worth . But whether a home purchase pays off huge — or at all — is largely a function of geography. It’s a kind of wealth inequality that doesn’t get much attention but can have big consequences for your finances. It means some people hit the real estate lottery, blessed with gobs of equity they can tap for spending or bailing themselves out in retirement even if they haven’t saved enough. Others can do everything right — buying homes they can afford and diligently paying down their mortgages — but have far less to show for their efforts. The solution isn’t necessarily to buy into hot markets, since predicting which markets will outperform in the long run is pretty much impossible, said David Blitzer, managing director at S&P Dow Jones Indices, which publishes the S&P CoreLogic Case-Shiller Home Price Indices. A better course is to invest in stocks, which historically deliver better returns than other investments and help you build wealth regardless of where you live. People often believe homes are a better investment than they actually are. On average, home prices nationally have barely kept up with inflation since 1900, Blitzer said. Most of the nation’s housing wealth is concentrated in just a few states, notably California, New York, Florida and Texas, according to an analysis by the Urban InSee HOUSE, Page 2R
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Look for rent deals later this year in Phoenix Apartment dwellers could get a break with building boom underway in Valley Renters in metro Phoenix are getting a bit of a break these days. It’s not that rents are falling, just that they aren’t rising as fast as they did last year. The average cost of leasing a Valley apartment grew by about 5 percent during the past year, according to new data for the national research firm Yardi Matrix. In 2015, the monthly cost to lease a Phoenix-area apartment jumped almost 8 percent. But more bargains could be coming renters’ way soon. The Valley is in a midst of an apartment building boom. So many projects are popping up so fast, it’s getting tough to keep track. In central Phoenix, it seems as if a new complex is replacing an old building or filling in a vacant lot on every other corner. About 4,000 apartments are in progress or planned in the area. Demand was so high for apartments in downtown Phoenix at the end of 2015, the area had the highest average rent in the Valley. But that’s already shifting a bit. Many apartment developers are already building in some rent deals because of the number of new complexes going up, according to real estate analysts. In Scottsdale, another popular spot for new apartment development, the average rent fell almost 1 percent last month, according to ApartmentList.com. Renters in Peoria and Mesa, where there are fewer new complexes underway, aren’t seeing any dips in their monthly payments. The average rent in both Valley cities climbed more than 1 percent in March. Rapidly rising Valley rents have definitely enticed more people, particularly Millennials, to buy. But homebuyers are seeing rising costs, too, as the area’s prices continue to steadily climb. While rent increases will likely wane more this year, metro Phoenix home prices aren’t expected to fall. So the big question is, what will the apartment-building boom mean for the Valley’s housing market?
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This advertisement is a solicitation by Scout Mortgage, Inc. for a mortgage loan. Not all applicants will be approved. Good Credit and Verifiable Income Required. Other loan programs are available. Rates are subject to change. Call for Details. AZ MB 0903218 / NMLS #56553. AR-0008663714-01
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PARADISE VALLEY | 6310 North Yucca Road| BY APPOINTMENT ONLY
CLASSIC SCOTTSDALE STYLE. An entertainer’s paradise with MLS# - 5580467 plenty of space, this generous home is nestled on an incredible .83 Bedrooms - 4 ACRE lot with picture-perfect curb appeal. The sunlit living room Bathrooms - 3 has a trio of windows with plantation shutters while the beamedPool - Yes ceiling family room enjoys a two-way fireplace. Eat-in kitchen. Attractive tile, plush carpet, rich wood, magnificent Marble dress Sq. Ft. - 3,068 the floors. Office has built-in workstations. Spacious bonus room. Garage - 2-Car Relaxation awaits you in the master with a luxurious bath. A pool, Lot Size - .83-ACRE spa, lawn, sport court and patios set a stunning alfresco scene. New ZIP Code - 85254 amenities include dual-pane windows, elastomeric coating on roof, pool motor, sand filter and two AC’s. Call to See. - Joseph Callaway Online Pics - ThoseCallaways.com Price - $764,900
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MAGNIFICENTLY REMODELED ESTATE IN GUARDMLS# - 5529604 GATED FINISTERRE. Exquisitely remodeled with spectacular Bedrooms - 5 finishes and fixtures, this magnificent estate is designed to meet the Bathrooms - 8 approval of the most discriminating buyer. Shown by appointment Pool - Yes only. Sweeping circular drive, dramatic portico entry. Opulent entry hall w/marble flooring. Grand-scale great room w/soaring Sq. Ft. - 10,671 white paneled ceiling. Dream kitchen w/superb accoutrements. ZIP Code - 85253 Family room w/wall of sheer glass retractable doors. Villa-like rear grounds w/swaying palm trees, lush lawns, towering shade Online Pics - BaldwinTeam.com Price - $5,900,000 trees, mature foliage, elegant pool, generous patios accented w/ cascading arches. Guest house. Own gated entry inside Finisterre. Visit tourfactory.com/1685059. Details and more info inside.
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