If you had invested $100,000 in the stock market in the 1st quarter of 2000 (10 years ago), what would your investment be valued at today? Of course the answer would depend on what the specific stock or stocks you bought, but consider this:
The Dow went from 10,921 on January 3, 2000 to 10,583 as of Jan 3, 2010 — and at this writing it’s hovering around 10,186. So, $100,000 invested in a DJIA-like stock portfolio ten years ago would now be worth less than $100,000. See the DJIA information for reference.
By comparison, the average house purchased for $100,000 in the Cincinnati-Middletown-OH-KY-IN MSA during the 1st Quarter 2000 would have been worth $122,438 in the 1st Quarter of this year. Click here for FHA data. Of course, all real estate is local and just as stock appreciation depends on the particular stock, real estate appreciation depends on the particular property.
So, which was a better investment? You be the judge. Besides, everybody has to live somewhere!
It is important that condo buyers be aware that new FHA lending regulations will be implemented starting November 2, 2009. It is still possible to get FHA financing on some condos but it will take more time. There are plenty of other ways to finance condos as well, so don’t let this deter you from buying a condominium.
If there are Condominium listings in MLS that state that a condo is “FHA approved” or “has FHA approved financing,” it is HIGHLY recommended that those remarks be removed if the condos were FHA-approved PRIOR to Oct. 1, 2008 (approx. 1 year ago). FHA policies have recently changed:
1) As of Oct. 1, 2009, all lender “spot approvals” are terminated.
2) Effective Nov. 2, 2009, all condos with “permanent” FHA approval status granted PRIOR to Oct. 1, 2008 will be rescinded. This means that the condo complexes MUST be re-approved by FHA.
3) Mortgagee Letter 2009-19 outlines the new approval process for Condo Projects, allowing lenders to determine project eligibility, review project documents, and certify to compliance of Section 203(b) of the National Housing Act and 24 CFR 203 of HUD rules. This new approval process will be effective for all case numbers assigned on or after Nov. 2, 2009.
If you were planning to apply for the seller funded downpayment assistance program through Ameridream, please be advised that this program will soon be coming to an end on October 1, 2008. There is speculation that this program is being eliminated by Congress because the foreclosure rate by those who participated in this program was higher than other groups.
Per the Ameridream website here is some background information on its Down Payment Assistance Program. Charitable down payment assistance funded in part with seller participation has allowed homeownership to grow without using taxpayer dollars. To date, more than one million families and individuals have utilized this down payment assistance, generating nearly $10 billion in home equity for those families. These working families qualify for FHA insured loans in every respect, but are unable to save the needed down payment. Please visit http://www.supporthomeownership.com to let your voice be heard to Congress to save this program.
The city of Cincinnati’s downpayment assistance programs are not affected by this change.
