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Daze of My Life/A Good Sign

by Kenneth B. Lourie

I read some great news in my neighborhood the other day for the future value of my home.

Approximately one-quarter mile from my house, and located on the same side of the east/west road that runs across the southbound-only dead-end street on which I live, a residential construction sign announcing the new “Valley Stream Estates” appeared, staked into the ground. In print was the following extremely uplifting text: “5 Luxury Homes on one-half-acre lots. From the mid-400’s.” A new high - for my neighborhood, anyway. Apparently the builders believe that my neighborhood, generally speaking, can comparably support the construction of “luxury homes in the mid-400’s.” Given that my house was recently appraised at a somewhat lower number, I was quite encouraged by the description and price of these homes permitted to be constructed. Presumably, these builders/investors would not be building and investing in “luxury homes” in my neighborhood if their business models didn’t indicate upside potential. And it’s this upside potential (the rising-tide-lifting-all-boats theory) that has me giddy with anticipation. I realize there are no guarantees in life, but already I can’t wait for my property’s next tax assessment in 2006. I expect it will rise, as will my real-estate tax, but a price has to be paid for such good fortune. Moreover, with the potential increase in my home’s value will also come increasing equity, especially since, thanks to an ’03 refinancing, less of what I now pay goes to interest and more goes to reducing principal. And it’s this increasing equity, combined with an excellent credit rating and high credit score, that offers promise for my family’s financial future.

Using other people’s money (a lender) to leverage an investment has often been a bit of a shortcut to earning dollars one previously might not have had the good sense or opportunity to accumulate. Equity is not necessarily a straight line to the promised land, but there’s probably less zigging and zagging than say, dollar-cost-averaging in your favorite mutual funds, and maybe even quicker, too.

Granted, the upside potential/growth in my home’s equity to which I refer is hardly a definite, but it’s reassuring to read that somebody wants to put his money where my mouth and family are. Maybe I’m deluding myself into thinking that, thanks to the construction of these luxury homes, dollars previously unaccumulated eventually will boomerang onto my family’s future net worth statement. I can hope, can’t I?

Practically speaking, what else can I do? Work harder, save more money? Of course, but even dollars invested in tax-advantaged-type alternatives, however prudent and positive, have their limitations. Play Lotto to win? If only it were that simple. Sell my as-yet-unpublished book of Kenny columns, tentatively titled, “The Kenny Book: Questions to Life’s Answers,” for a Bruce Springsteen-inspired (“Rosalita”) “big advance”? Wishful thinking, but as yet, no offers.

Look, everyone needs a break, a little help along the way. And being in the right place at the right time sure qualifies. The decision to buy our house wasn’t exactly my idea, so I don’t deserve any present credit; but after 11 years of old-home ownership, I could sure use some future cash.

Lourie is a regionally syndicated columnist who resides in Burtonsville, MD.

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