Part 2 of 6 Steps to Becoming a Successful Real Estate Investor by Robert Kiyosaki and Dolf De Roos of Rich Dad / Poor Dad fame.

Part 1 of 6 Steps to Becoming a Successful Real Estate Investor by Robert Kiyosaki and Dolf De Roos of Rich Dad / Poor Dad fame.

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Employment

* After minimal employment gains in 2004, job growth strengthened in 2005 with the addition of 26,500 jobs, a 2% increase. National employment growth averaged 1.6% in 2005.
* The economic base is divided into 11 “supersectors” or broad industry groups. Ten out of 11 supersectors experienced employment increases in 2005, with only the Information sector posting losses. In fact, 2005 marks the fifth consecutive year of employment losses in the Information sector. The strongest gains were achieved in Natural Resources & Construction (+3.9%), Professional & Business Services (+3.4%), and Educational & Health Services (+3.3%).
* Employment growth in 2006 is expected to be similar to 2005 with the addition of 27,500 positions. Still, Metro Denver will continue to outperform the nation which is expecting a 1.8% increase in employment.
* The most recent Manpower Employment Outlook Survey indicates that the hiring pace in Metro Denver will increase in the first quarter of 2006 and that fewer companies will reduce staffing levels. About 30% of the companies interviewed plan to hire more employees in the first quarter and only 4% of respondents plan to reduce their payrolls during the January-March period.
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Housing Market to “Normalize” in 2006

WASHINGTON (January 10, 2006) – The key word for the housing market in 2006 is balance, with a return to a more normal rate of price growth, according to the National Association of Realtors®.

David Lereah, NAR’s chief economist, said current trends in the housing sector are healthy. “We don’t need to break a record every year for the housing market to be good – in fact, cooling sales are necessary for the long-term health of this vital sector,” Lereah said. “A modest slowdown in home sales, coupled with improvements in housing inventory, means the market is in the process of normalization. That will help to bring balance between home buyers and sellers, yet sales will remain historically strong.”

After setting a fifth consecutive annual record, projected to 7.10 million units for 2005, * existing-home sales are forecast to ease by 4.4 percent to 6.79 million this year, which would be the second highest on record. New-home sales, which should be a record 1.29 million for 2005, are expected to decline 6.0 percent to 1.21 million in 2006 – that also would be the second best year in history. Total housing starts for 2005 are seen at 2.07 million units – the highest since setting a record 1972 – with a 6.6 percent slowing to 1.94 million this year.

“A lot of demand has been met over the last five years, and a modest rise in mortgage interest rates is causing some market cooling. Along with regulatory tightening on nontraditional mortgages, there will be fewer investors in the market this year,” Lereah said. The 30-year fixed-rate mortgage is likely to trend up gradually to 6.7 percent during the second half of the year. “This will preserve generally favorable affordability conditions and keep the housing market at a more sustainable sales pace.”

NAR President Thomas M. Stevens from Vienna, Va., said price appreciation should be at more normal levels across most of the country. “Buyers are no longer competing for a tight supply,” said Stevens, senior vice president of NRT Inc. “That means home prices generally will rise much closer to long-term norms, which is the overall rate of inflation plus one or two percentage points. Lower price appreciation will keep the door open to first-time buyers while preserving the investment advantages of homeownership for sellers.

The national median existing-home price for all housing types, projected to jump 12.9 percent to $209,100 for 2005, is forecast to rise 5.1 percent to $219,700 this year. The median new-home price, which should be up 4.6 percent to $231,300 for 2005, is expected to increase 6.0 percent this year to $245,200.

Inflation as measured by the Consumer Price Index is projected to rise 3.4 percent for 2005 and 3.0 percent in 2006. Inflation-adjusted disposable personal income is forecast to increase 1.3 percent for 2005 and 4.6 percent this year.

Growth in the U.S. gross domestic product is likely to be 3.6 percent for 2005, with GDP seen at 4.0 percent this year. The unemployment rate is expected to drop to 4.8 percent by the end of the year.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.
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*Existing-home sales data for December, including 2005 totals, will be released January 25; the next forecast is scheduled for February 7, and the Pending Home Sales Index will be February 1.

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