Oil prices > Is A Housing Bubble Brewing?

Is A Housing Bubble Brewing?

In the 1990s, dot-com mania swept the nation, and swelling investment portfolios were the toast of the town. The real estate market is surely today's version of that hot topic (Internet searches for "housing bubble" turn up almost one million hits). The public is fascinated and seduced by the enormous wealth potential created by an appreciating asset held by two-thirds of U.S. households. What will happen if this appreciation stops, or worse, if housing prices collapse?How We Got HereHome prices have risen about 11% annually since 2002.

Northeastern states lead the charge? appreciating about 20% annually?with the South's 9% annual rate bringing up the rear. Most investors don't realize that stocks have in fact been appreciating more than real estate since 2003. The S&P 500's annual rate of return alone is about 18%. Many investors?still stinging from out-sized losses suffered during the dot-com crashes?understandably gloss over the stocks' superior return. Real Estate, for investors reluctant to reenter the stock market, is today's new "hot dot." The cause for real estate's recent growth is twofold?increased household formation and a declining mortgage rates.

The former is an issue of demand outstripping supply: new housing construction rates have remained relatively constant since the 70s while family demand for new homes has skyrocketed by about 75%. As a result, prices have been rising annually by about 6.5% since 1970?buffered by legislation in 1997 exempting the first $500,000 of profits from any home sale. In addition, most real estate investors enjoy a full deduction of mortgage interest (carrying charges) for their investment. Imagine modern investing if stock prices garnered the same tax benefits!The mortgage rate decline adds fuel to the real estate fire?falling by more than a net amount of 1% between 2001 and mid-2003?reducing monthly payments for home ownership almost 20%. Adjustable rate mortgages fell even more, with three-year adjustable rate mortgages down about 1.25%, reducing monthly cost by 35%.

Lower rates increase the number of qualified first-time homebuyers while prompting many homeowners to refinance and withdraw funds accumulated in their "equity piggybanks".The general cry among today's economists and financial advisors is that our economy is now driven by newfound "borrowed money." While outstanding mortgage debt relative to household income has climbed 9% since 2002, these same households are simultaneously using their mortgage debt to restrain credit card borrowing?realizing a 10% decline in credit card debt to household income, if not more. Households are shifting from expensive credit card debt to cheaper, more tax-efficient mortgage debt and reducing the cash flow needed to regularly service it. Most U.S. households today dedicate an estimated 13.5% of after-tax income to all debt service, down from 14.8% in 2000. This decrease won't cause a one-time bump in consumer spending, but should have a longer-term effect on consumers' disposable income.

With the prospect of stabilizing mortgage rates, we see no further benefit accrued from the recent spate of mortgage refinancings.A Soft LandingThe looming specter of higher interest rates threatens to reverse the real estate appreciation trend. As the Fed drives up short-term interest rates, those seeking adjustable rate mortgages are experiencing a sharp rise in entry-level home ownership costs. Longer-term fixed rates have hardly risen, but the Fed hasn't completed its plan. Prospects of increases in both short-term and long-term mortgage rates will serve to increase mortgage financing costs, impacting a first-time home buyer's ability to qualify for loans and bringing the "refi" market to a screeching halt. This tide of real estate appreciation will ebb as soon as we see upward pressure exerted on interest rates.

Regardless of how mortgage rates change, the general pace of real estate appreciation will taper. To maintain the recent appreciation trend, two highly unlikely outcomes?federal legislation encouraging new real estate leverage or a steady drop in mortgage rates?must occur. Look instead for softening real estate demand with a corresponding drop in real estate values. That said, we do not believe there is a real estate bubble or foresee a drop in real estate prices large enough to upset our economy and financial markets.ConclusionInvestors expecting a continuation of recent real estate growth trends are in for major disappointment. Without lower interest rates, favorable changes in tax policy, or unexpected demographic shifts in population, real estate price appreciation will return to its traditional long-term 6.5% return rate.

This reversion may not take place until real estate prices stage a pullback, and in certain parts of the country, this pullback may be more pronounced. Rest assured that no drop in real estate prices will resemble the dot-com bubble that burst in the 1990s, leading us to believe that, when compared to real estate, investing in the stock market may offer better potential over both the short- and long-term..

John Allison is the president and chief investment officer of Allison Investment Management, a firm he founded with his son, David, in the beginning of 2003.
John began his career in the investment industry in 1982, when he joined the Columbia, SC office of Smith Barney. A graduate of Wofford College and one of Money magazine?s 1988 ?Outstanding Stock Brokers,? he served as branch manager of Smith Barney?s Winston Salem, NC and Greensboro, NC offices from 1992 through 1998. John left Smith Barney as vice president and senior portfolio manager in 2000 and joined Fisher Investments as a regional vice president in the Private Client Group before founding his firm.
John currently holds the following registrations:
Series 7, Series 8, Series 63, series 65.
In addition, he is an arbitrator with the NASD.allinvmgt.com john@allinvmgt.com

TruckXpressions.com Upgrades Truck Accessories Website For Easier Online Shopping

Lexington, KY (ContentDesk) December 13, 2005 -- Just in time for the holiday season, online pickup truck accessories retailer TruckXpressions.com launches a new shopping experience for the automotive accessories consumer. TruckXpressions.com specializes in aftermarket wheels and
truck accessories, ranging from stepbars, truck bed covers, chrome trim, lighting, and cargo management, to towing products, electronics, performance enhancements, and more.
TruckXpressions.com begins a new era online this fall. Having sold wheels and pick up truck accessories online for several years with a history of excellent customer service, fast shipping times, and great prices, the new website design will be a more user friendly version of their past websites.
This new site will be a much more pleasing experience for the truck accessories customer, says TruckXpressions.com Webmaster Dan...

TruckXpressions.com Upgrades Truck Accessories Website For Easier Online Shopping

Oil prices > TruckXpressions.com Upgrades Truck Accessories Website For Easier Online Shopping

Spicy Autumn Soap Collection at Everything Shea Aromatic Creations

Beverly Hills, CA (ContentDesk) October 4, 2005 ? Discover a spicy selection of new glycerin shea butter soap additions such as Cinnamon, made with a touch of real Indian cinnamon bark essential oil, Apple-Mint, Cranberry Spice, Pumpkin Harvest, Comptoir Sud Pacifique's (type) Coco Vanille, Green Apple, Applejack & Peel, Ginger Fig, and the special edition feature -- La Brea Tar Pits soap.Bath & Body Products Designer Lisa Maliga describes her resourcefully named La Brea Tar Pits soap as: "The distinctive grooved shape of this natural soap comes from a special mold. The large 6.5 oz soap is gently exfoliating as it contains whole rolled oats and cornmeal. Only pure lavender and tea tree essential oils are used and it has extra shea butter. It's recommended for people who garden, paint, fix cars, or just need a super cleansing soap. And yes, it does remove tar -- it's named after those big pits of tar located in Los Angeles, California." Spicy Autumn Soap Collection at Everything Shea Aromatic Creations
Oil prices > Spicy Autumn Soap Collection at Everything Shea Aromatic Creations

Air Conditioner Filters Tutorial

Copyright 2006 Raymond Burton

One of the most important things to maintain on your new cooling unit is the air conditioner filter. Dirt and debris in the filter will reduce the air flow and thus the effectiveness of your conditioning unit. Once your air conditioners filtering unit becomes very clogged with dirt and debris, those dirt particles will bypass the filter and start messing up the air quality along with the machines working parts.

While some air conditioner filters can be cleaned and reused, some need to be replaced altogether. If the filter on your cooling system can be replaced, it should be done or at least checked every month or two. Just like in any machine, the frequency that you change your air conditioning filters depends on the external operating conditions.

Dusty environments combined with heavy use will speed up the need for a cleaning or replacement of your systems filters.

Traditionally most simple air conditioning...