Tapering & Simmering

Copy for Real Estate Guide Column for 2-10-06   (452 words)

REAL ESTATE PATTERNS
By Ken DuVall

TAPERING & SIMMERING, BUT…

By now you probably are aware that 2005 nationwide was the strongest year ever for housing. Over 7 million homes sold last year. As they say in show biz, it’ll be a tough act to follow. National home price appreciation was an astonishing 12.7% last year. The national median price hit a record $237,300. This year’s appreciation is estimated at between 6 and 7%. This cooling down period is just what the doctor ordered because it will slow speculative buying and the growth in risky loan products. By the way, “flippers” that bought and sold homes for a quick profit now face severe IRS scrutiny as to being classified as dealers, liable for taxation at ordinary income rates, vs. the lower capital gains tax. Housing inventory will rise to historically normal levels after years of shortage. But 2006 will be no slouch. This year we’ll see a better balance between supply and demand and between buyers and sellers, slower but stable appreciation, and less speculation, all good influences. The experts are now forecasting housing sales will “only” be the 2nd best year ever. The market isn’t stalling. It’s simply winding down to a sustainable expansion. California, as always, will fare far better than the country as a whole. Chico will remain as one of the State’s hot spots as people continue to head for our easy off-ramp from the fast lane seeking the good life.
ALTERNATIVES
You could opt for one of the new ultimate high-rise condos under construction in Vegas for a mere $10 mil! Or… what if condos could float? My long time readers will remember when I wrote about developers fabricating old airliner fuselages into luxury homes built on top of huge central cement towers with an elevator up to the “home”. Well, check out this latest craze: luxury ocean cruise liners are being converted and newly built for lavish ship-based residential projects catering to folks that relish life at sea, and have money to burn. These real property transactions involve ownership of “a tin box in the midst of a ship that goes to sea.”
INCREDIBLE!
Sure to stir up new waves, they include meals and travel to world-class exotic ports, Paris, London, Rio, etc. Amenities on these “floating private residential communities” include among other items night clubs, on-board helicopter, swimming pools, casinos, bars, a golf simulator, jogging tracks, and full-sized tennis courts. The crew outnumbers the average 200 owners. You can get a 4 BR penthouse for a paltry $10 mil plus $6500 a month “home owner’s fees” covering medical care and utilities.  Good ol’ American entrepreneurial know-how and ingenuity strikes again! What’s next? “Space, the Final Frontier!” Captain Kirk, where are you when we need you?!

Ken owns Ken DuVall & Associates, Realtors at 3rd Ave. & Mangrove in Chico.  Ken was the 2001 President of the Chico Assn. of Realtors and the 1995 Chico Realtor of the Year.  See Chico MLS listings at www.KenDuVall.com and call Ken at 345-3700 for all your real estate needs. Free consulting.