In this issue

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review May 9, 2005 / 30 Nisan, 5765

Home, Sweet Home

By Mort Zuckerman

Mort Zuckerman
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http://www.JewishWorldReview.com | Check your water cooler or dinner party conversations. These days, everyone's talking about the soaring prices of residential property. The market is on steroids. Prices have been rising at the fastest rate in five decades, double digits in most markets: up by 27 percent last year in California, over 20 percent in Florida, 15 percent in New York, 35 percent in Nevada. Compare all this with the three-year average annual return in a typical diversified stock fund, which has been about 5 percent or so, and you know why people are all stoked about the home real-estate market.

It is all very reminiscent of the fever of the "new economy" stock market in the late 1990s. Today, housing has replaced tech stocks as the hot way to accumulate wealth for the some 70 percent of American families who own homes, the result of an 11 million increase in households that own their own homes since 1993. Given our low interest rates and the jump of about 50 percent in all home prices over the past five years, it has been possible for many Americans to turn their home ownership into cash machines, through equity loans or mortgage refinancing, at a time when the stock market has been languishing. Last year, Americans took out about $225 billion of their home equity, and even more in 2002 and 2003. Half of that was saved, and half was spent.

Rising home equity has propped up family net worth, leaving millions of Americans to feel they can afford to spend—hence the consumer spending that's buoying the economy. The appreciation of home prices is estimated to have been responsible for about a quarter of America's economic growth over the past four years—as well as about 70 percent of the increase in net household wealth. No wonder the number of people who think this is a good time to buy is at a 20-year high.

Speculation. The purchase of second homes made up a record 36 percent of all home purchases last year, according to the National Association of Realtors—13 percent for vacation use and 23 percent for investment. That's three times the percentages just five years ago. Reflecting increased speculation, existing homes are turning over 50 percent faster than the average of the previous decade.

Can the good news continue, or is this a bubble? Well, there are some signs of trouble. The increase in adjustable-rate mortgages is one. It means more people are stretching to keep up—and if rates rise quickly, buyers with relatively short adjustment periods may be forced to sell. Second, a lot of pent-up demand has already been satisfied. Third, prices have risen to levels that make homes much less affordable today. Fourth, interest rates are on the rise, increasing the costs of buying and owning real estate. Fifth, new-housing starts are slightly in excess of sales. All these raise the possibility of a slowdown in the market.

But there's also some good news. Average U.S. home prices haven't declined basically since the Great Depression, even though there have been regional setbacks.

Housing prices dropped in the oil patch in the mid-1980s and in Silicon Valley after the dot-com bubble burst. The residential market often pauses after bursts like the ones we're now experiencing, so there's some vulnerability in areas where housing prices have risen extraordinarily fast, particularly if a downturn hits the local economies.

Nevertheless, people don't sell their homes as quickly as they do stocks, making any kind of sharp drop much less likely—especially given the tax advantages of homeownership and the continuation of remarkably low long-term interest rates. Furthermore, the good job and income growth we now have should support the current market. And there are all those between the ages of 30 and 44, who represent the prime market for new homes, particularly for second homes bought with an eye toward investment and retirement. And don't forget our unprecedented wave of immigration. That accounted for more than a third of our household formation in the past decade and explains the fact that 40 percent of new homeowners during the same period were minorities.

What we're seeing today is a re-enactment of a historic American homeowning tradition. Of course, homeowners who count on increasing their equity stake have to calculate that they need five years of residency at least before their mortgage payments can get past the point where they are mostly for interest. But that's very similar to the traditional period for building an equity stake in most investments.

When America expanded from its coastal fringe, the government encouraged settlement by offering 160 acres that a homesteader could purchase by working the land for five years. It was the single most important stimulus for building a new nation of property owners. Today, homeownership has become the single most important element in the widest participation in an era of rising wealth. This is an ownership society for real.

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JWR contributor Mort Zuckerman is editor-in-chief and publisher of U.S. News and World Report. Send your comments to him by clicking here.


© 2005, Mortimer Zuckerman