NC Real estate may be getting cheaper. But homes are always expensive. Like any good knee-jerk contrarian, my enthusiasm for the property market grows as the bad news piles up. Only last week, the Federal Reserve’s “beige book” report on regional economic conditions noted that housing markets continue to soften, with sluggish home sales and falling prices in some areas. So is it time to buy the NC lakefront, NC riverfront or NC vacationhome you’ve always wanted?

According to home-finance corporation Freddie Mac, U.S. house prices climbed 6.2 percent a year over the past 30 years, versus 4.3 percent for inflation. Beating inflation by 1.9 percentage points a year is (pun intended) nothing to write home about. To make matters worse, after the current decade’s blistering performance, even slimmer returns may lie ahead. Instead, as you toy with whether to trade up to a larger place or purchase a second home, your real focus should be the dividend. This dividend is the rent you receive or, if you live in the house yourself, the “imputed rent” - the rent you would have paid if you didn’t own the place. This rent might be worth 7 percent or 8 percent of a home’s value each year, though the figure will vary depending on the location.

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