there are always "experts" on both sides. There are many that believe there is another market correction and housing crash coming in 2011-2012. Im not saying its a bad time to (im buying right now) but make sure if something did happen you wouldn't go broke. Make sure if your place is empty than you can still afford to pay the rent.

 

Thats it? A few if my friends have been buying shortsales and foreclosures, fixing them up and flipping them for $50-100k profit within 6-12 months. Id look at foreclosures and shortsales the most. Also i wouldn't offer anything more than 15% under list. ALso look at how many houses that are available in your area. if its too much you might not want to buy there since that area is already flooded.

 

While that might be true in Cooper City Florida that's not true in all parts of America. The Trulio report was just released and it shows that in 72 major metropolitan areas it's cheaper to buy than rent.

In Texas, as well a lot of the country, the majority of the areas are still getting Appreciation not Depreciation. For instance Fort Worth had a 6% Appreciation rate in 2010 and Dallas had 4% Appreciation. Fort Worth got a gold star in the Trulio report and they said it made especially good sense to buy vs rent there as the economy has been so good. The employment rate, steady appreciation rate, growth rate, etc. have barely bobbled during the downturn.

The areas that won't recover quickly were areas that had unsupported price increases and interestingly enough were also areas that had home equity loans that allowed you to borrow 125% of value.

No one complained when they made all the extra money from the unsupported value increases.

National Association of Realtors just released figures that show that nationally pending new home sales are up 3.5% and pending existing home sales are up 12.5%.

The market turned at almost the exact moment the last election was over. All the national builders have geared up for a much more active 2011. They are hiring and expanding. For the first time in 2 years we are starting to see new housing developments being built and added phases to the existing housing developments. My mortgage business is up 5 fold since December.

My banker buddies are very hopeful for 2011 as well. They say that due to the inability to forecast what the old congress would do they had to stop doing a lot of their loans. They've not been able to plan for even 6 months in the future so long term loans suffered.

You've not been able to do long term locks on home loans inexpensively for 2 years due to this same issue. Suddenly the cost of a long term lock is dropping. Which is good because interest rates are rising with no let up in sight. Property values are up too.

Rates have risen close to 1% since November and in March there's another big interest rate hike due to a change in the pricing model of all conventional loans. FHA & VA should follow soon thereafter.

If you have even the slightest desire to buy you'd better do it quickly. You passed the bottom of the market last year and the recovery looks to be almost as quick as the bottom feel out. Except for the areas that weren't worth what they were asking for them in the first place. There are places that will take a decade to recover, but those are very limited in scope.

Good news for the north? Housing prices are so low that Michigan is attracting lots of foreign investors because it's cheaper to buy a house than a car. I'm really hoping they'll dome Michigan and make it the largest indoor amusement park.

EDIT: FYI do you have any idea of the foreclosure rate? Due to the media many people think it's a lot higher than it really is. I've been taking a poll and most people I've talked to think it's in the 20-40% range. That couldn't be further from the truth.

Let me give you an example. They said the foreclosure rate in the DFW area just dropped 7%. No it didn't. It dropped from 1.95% to 1.82% so yes 1.82 is 93% of 1.95 but that's still not the same thing in people's minds. In 2005 at the height of the boom foreclosure rates ranged from 1.5% to 1.9% so in Texas the foreclosure rate is NORMAL.

What about the rest of the country? National figures show the foreclosure rate to be 4.69%, still a far cry from the 10%-20% increases you were hearing. Negative news sells!

The highest foreclosure rate I could find in the nation was a little town in Arizona and it only had a little less than 6%.

 

^ Statistics can be skewed to either side of the argument. Foreclosures are technically down in MA but than again thats only b.c of the recent court ruling. However, he is right now is the time to buy in MOST places.

 

http://www.standardandpoors.com/servlet/Bl...lobnocache=true

Case Shiller show what looks to be a double dip. Besides there's now way RE is going anywhere but down to flat as long as unemployment remains at 10% and who thinks that going to change anytime soon?

In the end, all bubble markets return to pre bubble prices and that hasn't happened yet.

 

That's what I do in San Diego (BTW one of the best market in the US).

I buy for about 60-70% of ARV (after repairs value), rehab and rent properties. Always looking for 2 or 3 bedrooms, location, location, location!!!
Make about $500+ a month per since I still have mortgages.

Goal is to get in the teens rental properties, no more mortages = SET

It's a very long process, lots of traps, but the banks are willing to deal after their big mistakes. Just as a reminder, they're in the business of "LENDING" money, not owning properties... (that's why I buy as of now only exclusively Fannie Mae foreclosed props, they are dealing).

More than ever people are RENTING!!! we all did at one point in our life...be a landlord (love the sound of it...)

And also as a Landlord, just so you're aware, you will have your tenants calling you on SB Sunday because of a plumbing leak...

 

 

Once again, what RE's doing depends upon where you are located.

Most of the country never got hit by nothing, but the places that did get hit got hit hard. In most cases that was more of regional issues like YOU MADE TOO MUCH MONEY ON YOUR REAL ESTATE FOR A FEW YEARS PRIOR.

When you get up to get dressed in the morning and turn on the weather do you check the local weather or weather in L.A., Hawaii, New York or some other place you aren't? Same thing is true with the economic news.

 

In trading some people call it "talking your position" when you create an argument for something that you've already invested in. No one knows where the market will be in the next six months or six years. Someone on here quoted fanne mae as pointing towards a rally in homes - i worked at freddie mac in 2006-2007 and believe me, they are the last to know when and where the market will turn.

The truth is now MAY be a great time to buy. If you decide to dip a toe into the market, theres a good chance that you'll do well in the long run. However, one should only buy a place right now that they can afford to sit vacant for a longgggg time. If you're borrowing money to buy a home, whether it be primary or investment, you better have some nice cash reserves in the event that things go sour.

I love how short th e human memory is...people so quickly forget that the reason the market is crushed is because everyone thought that real estate was such a no brainer....food for thought.

 

Good post, but to followup on the "sour" possibilities. That cash profit each month can easily be wiped out by a non-paying tenant. You need to spend at least $1k for an eviction (unless you do it yourself) and consider that while you're spending money to evict, you're also not making money in rent and you can't show the property while occupied either.

For low rent, cheap places the probability of a deadbeat tenant is probably higher too. Just seems like you need 3-5 months of rent to compensate for evicting a non-paying tenant which may take 2-4 months to evict.

Source: I'm a lawyer in FL.