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Why Your Home Is Not A Good Investment – West Columbia, SC

Joseph Coupal - Monday, December 22, 2014
I've come to believe that for millions of Americans, a house is a large liability masquerading as a safe asset.

Not just because of the recent housing crash, although what an eye-opener that was.

But because after watching real estate implode last decade, the average American still believes their home will make a great long-term investment. The best long-term investment, even.

As my colleague David Hanson wrote last week, a recent Gallup poll shows that Americans now believe housing is the best long-term investment, beating out stocks, bonds, and gold.

They might be right, only because the average stock investor does so poorly that a home may indeed be their best investment. But housing has historically been a terrible bet for people who think it will return more than inflation. To show you what I mean, I have to tell you about my visit to Yale economist Robert Shiller's office a year ago.

Shiller — who won the Nobel Prize last year — is regarded as the world's foremost housing expert. He has married historical data with deep insight into human psychology to offer some of the best housing analysis anyone's ever produced.

Not only is Shiller brilliant, but he's one of the nicest guys I've ever met, easy to talk to and puts things in clear, easy-to-understand language. As we sat in his office eating donuts and drinking coffee, I asked him, in the broadest terms I could, what homeowners should expect out of their homes in the long run.

"The housing boom in the early 2000s was driven by a sense that housing is a wonderful investment. It was not informed by good history," he said. Most people now agree on that much.

"If you look at the history of the housing market, it hasn't been a good provider of capital gains. It is a provider of housing services," he explained.

By that, he means a home gives you a place to live, a place to sleep, a place to store your stuff.

But that's it. Americans believed — and still believe — that the value of their home will increase above the rate of inflation.

And that, Shiller says, is wrong.

"Capital gains have not even been positive. From 1890 to 1990, real inflation-corrected home prices were virtually unchanged."

Shiller — a pioneer of behavioral finance and one of the calmest, levelheaded economists I know — becomes animated at this point, almost irritated. Debunking the notion that housing is a great investment is one of his favorite topics.

Housing prices, he argues, could decline over long periods of time — decades, even.

"Why is that?" he asks me. I really don't know.

"Well, I think you have to reflect on the fact that it's done it before. Home prices declined for the first half of the 20th century [adjusted for inflation]. Economists discussed that back then. Why are they going down? The conclusion was ... of course home prices go down. There's technical progress. They are a manufactured good. Back in 1900, homes were handmade, you know, craftsmen. But now, in 1950, we can get all kinds of power tools and prefab. And [construction workers] were just better in 1950 than we were in 1900. So of course prices will go down."

Shiller also mentions that certain homes go out of style over time, dragging down prices. "What kind of houses will they be building in 20 years?" he wonders aloud. "They may have lots of new amenities. They will be computerized or something in some way that we can't anticipate now. So people won't want these old homes."

His animation peaked with a line I'll never forget.

"To me, the idea that buying a home is such a great idea is just wrong. They may very well decline for the next 30 years in real terms."

Real home prices may decline for the next 30 years.

The best thing about Shiller, and what sets him apart from your typical pundit, is that he has data to back up every point he makes.

In the early 2000s, Shiller wanted to see what nationwide home prices looked like over the long term. He was shocked to learn that no one had ever actually put that data together.

He dug around in libraries, crunched the numbers, and came up with an index that measured nationwide home prices going back to the 1890s.

This was a first. "The strange thing is, nobody else had ever made a plot like that. I can tell you, no one had ever seen that picture," he told me, shaking his head in disbelief. "People plot all kinds of data. Why wouldn't someone have done that? I still haven't figured it out."

The chart, measuring nationwide home prices adjusted for inflation, was this one:

From 1890 — just three decades after the Civil War — through 2012, home prices adjusted for inflation literally went nowhere. Not a single dime of real growth. For comparison, the S&P 500 increased more than 2,000-fold during that period, adjusted for inflation. And from 1890 to through 1980, real home prices actually declined by about 10%.

The reason Shiller warns that home prices could fall going forward is the simple observation that, heck, they've done it in the past. It's what history tells us to expect out of our homes. The entire idea that home prices increase in real terms over time is a figment of the 2000s housing bubble.

It's important to reiterate what a home does do: It provides a place to live. A place to raise your kids. A place to spend the holidays with your family. A place to barbecue with your neighbors. Even a place to rent out. That has tremendous value, of course. Shiller owns a home. He'd buy another if he needed one. "Basically, if I were in the market right now because I wanted a house, I would buy a house," he said.

The problem is that Americans expect more out of their homes than just a place to live. In 2010 — years after the housing bubble burst — Shiller's surveys showed Americans still expected their home to appreciate by more than 6% a year over the following decade. If history is any guide, that's probably about twice as fast as they'll actually appreciate by. Despite the housing crash, people still expect stock-like returns out of their homes.

Since a home is most Americans' largest asset, you can see how this becomes a problem. When you have inflated expectations about the largest asset you own, you walk down the path of financial disappointment. The value of American homes fell by nearly $7 trillion from 2007 to 2011. People who thought their homes would return enough to pay for retirement learned that Mr. Market carries a sledgehammer and takes no prisoners.

Everyone should live in a home they can afford and provides the lifestyle they desire. But assuming it's a superior long-term investment, one to rival stocks, is dangerous. There's just no evidence backing it up.

I think people run into two problems when thinking about the value of their house.

A home is typically the asset people hold the longest. They sell stocks after a few months, but keep a home for years, or decades. When you own something for that long, the returns you think you earned can be overwhelmingly due to inflation. The Consumer Price Index has increased six-fold since 1970. If you bought a house for $30,000 in 1970 and it's worth $180,000 today, you've earned nothing after inflation. You think you've made a fortune, but you haven't gone anywhere. Add in property taxes, insurance and repairs, and you're down.

Yes, you got to live in the house. That's huge. But it doesn't make living free.

If you have a mortgage, you're paying interest. If you own outright, or have a lot of equity, there's an opportunity cost of having money tied up in an asset that barely keeps up with inflation when you could have had it in something else, like stocks.

Say you and I both have $250,000. I buy a house for $250,000 cash, and you rent a house across the street for $1,000 a month and put $250,000 in the S&P 500. After 20 years, I'll have a house worth $200,000 in real terms, and you'll have a portfolio of stocks worth $330,000 adjusted for inflation (assuming the market's average real rate of return, and a 2% inflation rate on my rent payments). The difference between those two amounts is the opportunity cost of owning a house (and I didn't even include taxes, repairs, or insurance). In reality, it's hard to rent the same house for 20 years straight, and a lot of regions don't offer attractive rentals at all, so this probably isn't feasible. But it shows that the decision to own can be more about lifestyle and stability, not financial returns.

So, by all means, own a home. Just keep your expectations in check.

For more information on apartments in West Columbia, SC, contact Abberly Village Apartments.

#HowYouLive
Business Insider

Renters Insurance, Things You Need to Know – West Columbia, SC

Joseph Coupal - Thursday, December 18, 2014

If you live in an apartment in West Columbia, SC you may be considering purchasing renter’s insurance. If so, here are some facts worth knowing if you're still wondering about buying a renters insurance policy:

1. The landlord's policy will not cover your personal belongings

Contrary to popular belief, policies carried by landlords typically cover structural damage to the building and not your personal property.

"After acquiring a rental housing unit, landlords change their insurance policies from a traditional homeowners policy to a rental policy, and when they do that, it only covers just the structure, not the content or any of the tenant's belongings," James Emory Tungsvik, president of the National Association of Residential Property Managers.

So don't expect to have your sofa replaced if the living room catches fire.

Your renters policy will also cover theft of your belongings, whether they're stolen from your apartment or from anywhere else.

2. Your coverage likely extends beyond your personal possessions

Your renters policy likely will cover your legal costs if someone sues after having an accident at your place, and it will cover a certain amount of their medical bills.

It also will cover costs if you are responsible for damage to other people's property. A common example offered is when you (or your child) throw a baseball that breaks someone's window. Or perhaps you allowed the bathtub to overflow, causing damage in the apartment below.

3. Renters insurance isn't as expensive as you may think

Thinking the cost of coverage outweighs the benefits? Think again. While the price will vary depending on where you live, the various cost averages we've seen range from $12 to $30 a month, much less than you'd spend to replace your belongings.

4. Furry friends may hike up the premium

For all you pet lovers out there, especially those who own "aggressive breeds," don't be surprised if you're quoted a higher premium or denied coverage, depending on the dog. Check out this list from Forbes to see if your dog made the cut.

5. Luxury items may not qualify for standard coverage

Insurance providers often place limits on the replacement cost of luxury items such as jewelry, an art collection and other high-end items you may own. Purchasing an insurance rider to cover them may be in order.

How to evaluate policies

When selecting coverage for your possessions, you'll be choosing from two options: Replacement or cash value. The latter is less expensive because it pays out the depreciated value of the goods based on the date the damage occurred.

Once you determine which form of coverage best suits your needs, here are some other important considerations:

  • What are the exclusions, such as damage caused by hurricanes, earthquakes, floods or other natural disasters?
  • Do added safety features, including fire extinguishers, alarm systems and deadbolt locks, reduce the premium?
  • Are relocation expenses covered while repairs are being made to the unit?
  • How does the claims process work?
  • Are bundle discounts available to those who carry multiple policies with the company?

Bottom line: If you skip renters insurance to save money, it could backfire and cost you more in the long run.

#HowYouLive
cbsnews

Enjoy Elgin Lights and Raise Money for Kids with Cancer – Columbia, SC

Joseph Coupal - Tuesday, December 16, 2014

If you live in an apartment in West Columbia, SC, Elgin Lights opened yesterday. Get in the holiday cheer, check out the lights, and at the same time you will help raise money for Camp Kemo and kids with cancer.

For two months every year, Paul Towns dedicates his life to lighting up others. Towns is on year 17 of Elgin Lights, an intricate Christmas light show on his two-acre property that takes six weeks just to set up.

Up until 2004, his family tried to turn down donations -- until Towns was diagnosed with cancer.

"We were going through all of the pain and agony of what we were going to do and what my life was going to be about," said Towns.

It was at that same time that Towns saw a News19 report on Cole Sawyer, an 11-year-old cancer patient who spent some of his final healthy days at Camp Kemo.

"When that story came on, we said this is meant to be," said Towns. "We need to keep Cole's dream alive and keep sending kids to camp like he did so that they can be a child for at least seven days."

Since then donations have grown. Last year, Elgin Lights raised enough money to send 14 children to Camp Kemo.

While Towns' show has kept Cole's dream alive, what he didn't know was it would do the same for him. Just last month, Towns' family learned his cancer returned for the fifth time.

"God has a way of putting it every year that he does get it, around Christmas," said his daughter, Christina Churchwell. "Even though he's going to be going through this cancer and we know it's here and everything, we get to see these smiles. This helps him pull through the slumps."

"I know I'm going to be going through the chemo, I know I'm going to have surgery and it's right now, but this is still going to go on and this keeps me going," said Towns. "If this wasn't here and it was all dark out here, I don't know what I would do."

Despite his struggles, Towns refuses to keep even a penny for himself.

"I'm 57-years-old, I'm over the hill, I'm okay," said Towns. "It's kids, I want to try and get them to reach that point, anyways."

Elgin Lights is open from December 15th through the 24th from 6 p.m. to 9 p.m. at 2433 Charlie Horse Circle. 

#HowYouLive

wltx.com

Columbia Christmas Pageant is Now Showing

Joseph Coupal - Wednesday, December 10, 2014

If you live in an apartment in West Columbia, SC there aren’t too many dates left for you to enjoy the Columbia Christmas Pageant. This Columbia Christmas Pageant has been taking place for 26 years and has become a Christmas tradition for thousands of people in South Carolina!

With a cast and crew of 400, state of the art lighting, glorious scenery, and enthralling music the Columbia Christmas Pageant is a must attend for your family!

It is our gift to you so tickets are free, but you must have a ticket to enter.

2014 Dates and Times

Friday, December 12 at 7:00pm
Saturday, December 13 at 2:00pm
Saturday, December 13 at 5:00pm
Sunday, December 14 at 4:00pm

Want to see what every one is talking about? Watch the video.

#HowYouLive

More information - fbccola.com/christmaspageant

The Largest Drive-Through Lights Show Around – West Columbia, SC

Joseph Coupal - Friday, December 05, 2014

If you live in an apartment in West Columbia, SC there you can get into the spirit of the season by heading to Holiday Lights on the River from  6-10 p.m. through Dec. 31 at Saluda Shoals Park. This is the Midlands’ largest drive-through light show features the Dazzling Dancing Forest, animated scenes, Wetland Wonderland Walking Trail, Winter Wonder Ride downhill tubing, Santa’s Claus’ Gift Shop and more.

From November 26th through December 31, Saluda Shoals Park will showcase more than a million sparkling lights. Holiday Lights on the River features over 400 themed, animated light displays on a two-mile loop of the Park!

Enjoy the Dazzling Dancing Forest with its dancing, lighted trees synchronized to classical and whimsical holiday music. There is also a three dimensional Victorian Village, Old Man Winter, the holiday classic Twelve Days of Christmas and so much more, all in sparkling lights.

Take a stroll along the boardwalk through the Wetland Wonderland Walking Trail and watch nature come to life in sparkling lights. Take a hayride to the boardwalk or walk along the new trail to the Wetland and enjoy a laser light show and the Deck the Doors Holiday door display along the way.

Get ready for the slide of your life on the Winter Wonder Ride at Holiday Lights on the River.  Zip through a series of lighted arches and experience downhill tubing without the snow on this 125 foot, exciting, fun-packed family ride. Tubes are provided. The Winter Wonder Ride is suitable for children and adults 42" and taller. If you are under the age of (4) you must be accompanied by your parents or guardian.

#HowYouLive
More information - icrc.net/holiday-lights

Holiday Events at Five Points - West Columbia, SC

Joseph Coupal - Thursday, December 04, 2014

If you live in an apartment in West Columbia, SC you can enjoy the newest event in Five Points! Thursday, December 4th you can celebrate everything that is wonderful about this time of year during a holiday open house.

Stores will be open late and offering terrific sales and complimentary refreshments!

Here is what is going on:

  • Meet Santa – Families will have the opportunity to meet Santa in front of the Hootie Monument on the corner of Santee and Harden
  • Hot chocolate courtesy of H&R Block and holiday treats at the fountain
  • Music at the fountain
  • Horse carriage rides
  • Make A Wish Foundation’s Win a Star – Patrons who give a donation will be entered into a drawing to win and name a star
  • Roaming photography
  • The Salvation Army’s famous red kettle and toy drive accepting unwrapped toys
  • Pop up Tree Farm

#HowYouLive
More information - fivepointscolumbia.com/event/astarrynight/#sthash.6XJR8VO0.dpuf

Reconsider Renting - West Columbia, SC

Joseph Coupal - Tuesday, November 25, 2014

For as long as I can remember, homeownership has been a home run on the American Dream scorecard.

When I graduated from college, my grandmother gave me two choices: live with her or buy a home. In her mind, to rent meant I was a failure financially.

“When you rent, you get nothing for your money,” Big Mama would lecture.

Since I didn’t have enough money saved for a home, I lived with my grandmother, who had been my guardian since I was 4. I hated that year of ridiculous rules. No shoes under the bed. Don’t turn the television knob to the left, only to the right (this was before remote controls). And Big Mama fretted I would be late for work, so she would wake me at 6 a.m. for a shift that didn’t start until 10 a.m.

After a year of this, I decided I had to move. But I still didn’t have enough money saved to buy a home. So I rented.

Every time I called my grandmother, she would berate me about renting. By the end of my lease, I had saved enough to buy a condo, thanks to a first-time homebuying program. I’ve never rented since.

I tell you this story for two reasons. I understand where my grandmother was coming from. Owning a home was the only way she knew of creating wealth for herself and our family. She didn’t trust investing in the stock market. I joke that the only bond she ever owned was the adhesive for her dentures.

However, in the 2000s, the benefit of homeownership became twisted and too many people were persuaded to pay insane prices and take out unsustainable mortgages in the quest to fulfill the American Dream.

Then the housing crisis smacked people back to common sense.

I’ve never been supportive of stigmatizing renters as financial failures. Although it’s true that homeownership has been the path to prosperity for most American families, it’s not the only path. If you buy a home before you are economically ready, it can drag you down financially. As we saw with the drop in housing prices, you can be left without a home and your savings.

A just-released study by HelloWallet, a company that provides online financial help as an employer-provided benefit, puts the debate of homebuying versus renting in perspective. If the cost of renting is less than that of owning a home and you save well, you can accumulate just as much wealth as homeowners do, the study contends.

“Buying a home is akin to a rite of passage, simply something people do when they can, regardless of their circumstances or market conditions,” Aron Szapiro, a consumer finance expert for HelloWallet, writes.

From 2005 to 2012, all home prices collapsed by 42 percent, Szapiro calculated using Case-Shiller housing data.

So, the question HelloWallet set out to answer was this: Could renters build more net wealth than homebuyers, while taking on much less risk, by forgoing homeownership and investing the yearly savings from renting in a tax-deferred retirement plan?

They could indeed, the study concluded.

“Over half of current homeowners, or over 40 million households, purchased their homes during time periods when average homebuyers would have been better off renting and investing,” Szapiro noted.

Of course, the key is that renters need to have the discipline to invest the savings they get from renting.

HelloWallet listed a number of findings in its study, but two stood out for me:

    Be careful about the bias built into “buy-or-rent” calculators. Many of the free online tools that are supposed to help determine if buying a home is right for you are heavily biased toward homeownership, the report points out. The calculators often compare homeownership to saving in an interest-bearing bank account earning low returns. “Since homes are a risky asset, an alternative investment should also present some risk, such as an investment in a mix of stocks and bonds aimed at building long-term wealth for retirement,” Szapiro says.

    Don’t overestimate the tax advantage of homeownership. An overwhelming majority of homebuyers — 80 percent — listed the federal mortgage deduction and other tax benefits as a reason to buy rather than to rent. Yet more than half of homeowners with mortgages don’t even take the deduction because they don’t itemize their federal tax returns. “We find that federal tax benefits for homeownership go largely to high-income families in high-cost areas, and even for these families, the benefit is fleeting,” Szapiro says.

For me, the take-away from the report is that buying a home is not a no-brainer. It never was. There’s much to consider and the old rules of thumb aren’t always true, including assuming that renting is a detriment to wealth-building.

For more information on renting apartments in West Columbia, SC, contact Abberly Village Apartments.

#HowYouLive
roanoke.com

Lights Before Christmas - West Columbia, SC

Joseph Coupal - Monday, November 24, 2014

If you live in an apartment in West Columbia, SC then you can enjoy Lights Before Christmas from November 21 – December 30 @ 5:00 – 9:00PM (Closed November 27, December 24 and 25). Bring the kids and the camera and see why Lights Before Christmas has continued as a family tradition for more than 25 years!

  • Nearly one million twinkling lights
  • Countless animated images
  • Dazzling Music in Motion Lights Spectacular
  • Nightly visits with Santa (on-site beginning at 6:00PM each night through December 23)
  • Warm memories and holiday cheer around the Jingle Bell Bonfire
  • Hot cocoa, marshmallows and other festive foods available for purchase

While you may spot a few night owls during Lights, most of our residents will be off-exhibit sleeping.

#HowYouLive
More information -riverbanks.org/events/lights-before-christmas.shtml

November Means it is Time for the South Carolina Oyster Festival – Columbia, SC

Joseph Coupal - Wednesday, November 19, 2014

Head to the Oyster Festival this weekend if you live in an apartment in West Columbia, SC. It’s cold! That means it’s time for an oyster roast. Huddle around a pile of steaming mollusks with your family and friends this Sunday, Nov. 23, when the South Carolina Oyster Festival returns to the Robert Mills House and Hampton-Preston Mansion. It’s the 19th year for the event, which purports to be the largest oyster roast in South Carolina.

Tickets are $5 in advance and $10 at the gate; children 12 and under get in free. Once you’re in the gate, you can buy buckets of steamed oysters. Bring your own oyster knife — or you can buy one there. It’s a good idea to bring some lawn chairs or blankets, too, so you can settle in to watch some live music.

Beer? Wine? Yeah, there’ll be some of that for sale. And if you’re not into shucking and eating your own oysters, you can buy oyster shooters, fried oysters and oyster gumbo. The festival is at 1615 and 1616 Blanding Street in downtown Columbia and kicks off at 11 a.m. Sunday.

#HowYouLive
free-times.com

Gamecocks and Clemson Tigers Donate Blood This Week! – Columbia, SC

Joseph Coupal - Tuesday, November 18, 2014

If you live in an apartment in West Columbia, SC you can help save lives while you support your team this week. Fans of the Carolina Gamecocks and the Clemson Tigers will take their rivalry off the field to help save lives at the 30th annual Carolina-Clemson Blood Drive. Donors will bleed garnet or orange to earn pints for their favorite school before the football teams face off for points.

The blood drive will be held this week through Friday, Nov. 21 on both school campuses. All University of South Carolina and Clemson University students, faculty, staff, alumni, and fans are encouraged to participate.

This Blood Drive is held this week before the Carolina-Clemson football game. During the holiday season, blood donations typically decrease. Over the past 30 years of this drive, the universities have collected about 100,000 pints of blood, potentially saving up to 300,000 lives.

“The Carolina Clemson drive is one of the largest blood drives in the country,” said Ryan Corcoran, Community CEO for the South Carolina Blood Services Region. “The impact of this drive cannot be understated. Thousands of patients will receive a potentially lifesaving gift through the efforts of students and fans.”

All presenting blood donors at the University of South Carolina will receive a commemorative blood drive T-shirt and the chance to enter to win giveaways items from local businesses. Refreshments will be served.

The coveted blood drive trophy will be awarded to the winning team at the game on Nov. 29 at Clemson Memorial Stadium.

Appointments are not necessary; you can just stop by and donate at one of the following locations:

Tuesday, Nov. 18

  • Russell House Ballroom, 10 a.m.-7 p.m.
  • Blood mobile at Thomas Cooper Library, 11 a.m.-6 p.m.
  • Blood mobile at the Close/Hipp Building (old business school near Capstone dorms), 11 a.m.-6 p.m.
  • Blood mobile in Greek Village, 11 a.m.-6 p.m.

Wednesday, Nov. 19

  • Russell House Ballroom, 10 a.m.-7 p.m.
  • Blood mobile at Thomas Cooper Library, 11 a.m.-6 p.m.
  • Two blood mobile in Greek Village, 11 a.m.-6 p.m.
  • Blood mobile at the Solomon Blatt P.E. Center, 11 a.m.-6 p.m.

Thursday, Nov. 20

  • Russell House Ballroom, 10 a.m.-7 p.m.
  • Blood mobile at Thomas Cooper Library, 11 a.m.-6 p.m.
  • Blood mobile at the College of Engineering and Computing, Swearingen Engineering Center, 11 a.m.-6 p.m.
  • Blood mobile at the Koger Center for the Arts, 10 a.m.-4 p.m.

Friday, Nov. 21

  • Russell House Ballroom, 10 a.m.-7 p.m.
  • Blood mobile at Thomas Cooper Library, 11 a.m.-6 p.m.
  • Two blood mobiles in Greek Village, 10 a.m.-6 p.m.

#HowYouLive
redcrossblood.org


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