Reading the Philadelphia Inquirer is a part of my daily morning routine. Perhaps it was the debut of the new format  this week that spurred the fanciful article that appeared in the February 1 Business Section entitled “Why Buying Gold May Be Beter Financially Than Buying A House”.

The crux of this article is due to the downturn in the real estate market over the past several years it may be wiser to invest some some of your down payment in the one of varied methods of gold speculation. Perhaps it would be wiser to continue renting rather than make a real estate purchase the article infers.

Given the fact that most home buyers have limited cash to invest in a new home, and pundits advising that you should only have 5% to 10% of your portfolio in precious metals, the prescribed investment at the max of 10%would only amount to $2,850 for a person who had the necessary 3.5% down payment and closing costs on a $300,000 house. How much could you expect to make on a $2,850 investment – at 10% it amount only to a gain of $285.

On the other hand what do you get for your investment in a new home? That’s right you get a home, a place to build memories, to raise a family, to be a member of a community, a mortgage interest deduction, and a modest return on your leveraged  invesment when the market recovers. Given the abundant inventory and continuing low interest rates you may even get a deal.

On a $300,000 house, say, the cost of maintenance, property taxes, and insurance add up to roughly $20,000 a year

That quote from the article really got me going. I can not imagine a homeowner ever spending close to that on the maintenance, taxes, and insurance for a $300,00 home on a yearly basis.  If you are spending that type of cash on a yearly basis for those 3 items you have some serious issues. What are you doing – replacing your roof on a yearly basis? A more realistic expectation of expenses would be:

• Taxes – For Wallingford Real Estate approximately $6,800
• Annual maintenance – expect 1% to 2% of the home’s value – so at 2% that amounts to $6,000 – $3,000 on the low side
• Insurance – $900 a year will get you very adequate coverage

Added up the total ranges from $10,700 to $13,700 per year – that is a far cry from $20,000.

Have you ever seen a gold bullion box that would make a good home?

Wallingford Homes

What features and characteristics does the “average” home sold in Nether Providence during 2010 possess?

Slightly over 76% of the homes sold during 2010 were single detached family homes, townhomes accounted for 11 sales or 8.8% of Wallingford sales.

A bank owned 6.4% of the inventory sold via foreclosure, translating to 8 of the 125 homes that changed hands last year.

If you purchased a home in our area during 2010 you would have paid an average of $322,253. Your new home would have 3 bedrooms on average with 2 bathrooms.

On the price spectrum, one homeowner paid $44,200 on the low end of the scale, while the high price topped out at $810,328. Take a look at all Wallingford homes or Wallingford towhouses/condos that sold last year.

At 54 years old your home has reached middle age, although 4 homeowners are enjoying a brand new Wallingford home. Harking back to those hot summers days, 76% of the homeowners will enjoy Central Air when the appropriate time comes around again. 60% of those new homeowners would be warming themselves by a fireplace during these snowy days.

59% of  new Wallingford homeowners have a garage in their new abode and should be avoiding cleaning snow off of at least one car. The basement will likely be full of moving boxes in 107 of the homes sold – 86%.

Alas our new neighbors would have inherited an average 2010 tax bill of slightly over $7,400 – so much for being average.