RE Market — Abysmal News Continues
I saw on the news recently some more real estate numbers about how the local real estate is cratering. In Austin, Texas sales of used homes are down 25% year over year yet the median price of a home is up by 7%. In places like Los Angeles, Nevada, Miami, California the homeowners are being killed and walking away from mortgages due to negative equity with year-over-year sales down as much as 50% in some areas.
It’s easy to doubt and pull out of the game in a real estate market like this one. Especially if you started investing in the last 5 years or so and haven’t seen these kinds of down markets before. Because real estate only goes up in value you were told. That’s true only if you buy at the right price and not an inflated euphoric value we saw from 2003-2005 peak. Or if you’re a home owner and bought your home in 2003 through 2005 you are most likely devastated financially because of the toll the major price hit has taken on your finances. It’s no secret the United States economy and by extension the US realestate housing market and home price increases have been driven by vast consumer spending.
And this consumer overspending was fueled by far to easy to get credit cash and loose financing regulations which allowed easy access to home equity lines of credit. I just saw a headline in the magazine Newsweek which said if you have cash to invest with asset prices as low as they are there are tremendous deals out there and a high quantity of them. Also if you’ve been watching the news you’ve probably seen an endless parade of real estate experts.
The common theme I see from these so-called home experts is the prediction that 2009 will be more of the putridness 2008 has shown to home sellers. Not until late 2009 or early 2010 is the real property market predicted to show a turnaround. At this time they say year-over-year sales are expected to uptick as well as prices in the most battered markets in the US.
So bottom line, as an investor I recommend you treat 2009 as the once in a blue moon chance to supercharge your wealth it is. Finding a local mls search engine is a key to success in this tremendous buyer’s market. These type of deals at these type of prices may not be available again ever. Even if they return it may be another five to seven years before you see this kind of opportunity again.
So ramp up your marketing efforts and your buying machine. Generate as many leads of home sellers as you can get your hands on. You may even want to look at multifamily investing, mobile home investing, or other such creative real estate tactics. Whatever lead generation you were planning to do double or triple it to the maximum your business can allow. This is a extremely limited window of opportunity so maximize every advantage you have to fully capitalize on it. By doing so you’ll expand your actual wealth more than you could imagine in such a short window of time.