Thanks for your post. It is often true that those who make the most money are doing the opposite of what seems normal to the mainstream.

If you can't make it selling houses at half value how are you going to make the grade when prices go back to real value?  The best marker is when prices are down.

Don

Alan and Don,

 Thanks for your comments and I agree with you both.  In reading your backgrounds you are both veterans in real estate.  Your comments, I am sure, are from your years of experience in the business.  The Top Producers and the investors who make the big money are going to be made in this market place.  Unfotunately, most people just follow the crowd and not think for themself.

The real estate market cycles around every 6 to 7 years.

As far as history has shown us, real estate will alway continue to appreciate in value over time!

Anybody, agree with that?

Ernie

This is exactly the opportunity we've discussed on several media outlets....that the time to buy and make the real money is getting all the undervalued stuff while everyone runs for the hills!

We should not limit this to investors only.....First time homebuyers that have been previously priced out of the market, can now get in, knowing they're getting a great deal!

Bill,

I totally agree that first time home buyers are in a great place to get into real estate.  I think that home owners who are moving up are able to get great deals too.  Higher priced home usually go down in value in a down market quicker than lower priced homes. 

I think that while the concept is correct your timing is off.  If you are trying to buy at or near the bottom then I would suggest waiting.

 If you go back to the last major national downturn 1987-1995 (depending on your specific local market) you will see that prices took a big drop, seemed to stabilize then dropped again.  Once the market leveled off (about 93-94) prices remained level for about 2-3 years.  At that point no one wanted to buy real estate since they had just witnessed a large price decline.  That is the time to buy - when no one is interested.  Right now all I hear is that now is a great time to buy.  If everyone thinks it is a great time, then according to your definition it isn't the time to buy.

Michael, I appreciate you commenting on here.  I agree with you that it is specific to local markets.  I think you have to checkout your specific local markets to see what part of the cycle it is in.  California where I am from is going through a down turn right now and it has been for about two years now.  That is residential real estate, but the commercial real estate is just at or near it's peak here.  San Francisco which is about 100 miles away from Sacramento where I live is still in a good market.  Homes are not declining and they are still seeing multiple offers on the same property.

I remember the 80's and 90's real estate market here in California.  It flips back and fourth every few years, but if you buy homes that are priced right and it cash flows (if it is an investment property) then you can weather the ups and downs of the real estate cycles.  It is all timing and I would say in my area, it is a good time to buy because we are at or near the bottom of the cycle.  Some of the deals I am seeing will not last and are closeouts from new home builders.  Where is the real estate cycle at in Chicago area?

Thaks again for your comments!

Caveat Emptor = "let the buyer beware." (Latin)    always good advice!

The most critical time for a RE investment is when you buy. 

Buy low and sell higher is my principle always.  I am watching my home town in LA county very closely.  It is hard for me to believe there is a bottom.  I had been there as Michael did and agreed with him: the best time is when nobody has interest on RE.  I saw almost everyone changed subject or turn his back on me when I mentioned a RE deal in 1995-97.  Believe me, that is the bottom.  At that stage, a lot of opportunities for us to create a "neg down" game, not "zero down."

BTW, how do you know your area is at or near the bottom of the cycle?  No offense, just curious.

Ernie,

Now is the time to be a contrarian in real estate. As the market remains soft in many areas, there are tons of bargains out there. Those who try to time the market are hopelessly misguided because it can't be done.

Ernie, Contrarian now thats a word. I am buying multifamily property in my local area. Although I would buy before this market shift. If it is a buyer market why are not more buying. I am picking up property because the investors (not really) new investors are panicking. I call myself a human aspirin. I will buy all there panic sale all day long. What a life!

Ed, thank you for your comments too!  I have been watching the market here in Northern California, boy what a market.  I appreciate your points and I agree with them.  Take care!

Esko, I have always been told that there is no crystal ball to really know how the market will play out.  I agree with you that there are great deals out there.  Everyone has different goals and agendas, so no advice will fit all.  But, I have to say if the property will cash flow and will hold it's value and even appreciate in the long hall, it could be a good deal today.  Thanks for your comments!

Frank, good for you!  It is a buyer's market because the supply and demand makes it so.  There are lots of homes and properties for sale.  I have people who buy continually, just like yourself, once they find a good property.  Some of my people are only going to buy one or two so the timing is more important to them.  I am an investor too, so I am always looking for a good deal to buy.  Thanks for your positive report!

Ernie, 

Great post.  I am a contrarian.  I also agree with the comments regarding investors that are always looking for the right deal.  When they make a TV show about income producing real estate investing we are in trouble.  It's not sexy and there is little drama but it pays well. 

A quick story on being a contrarian.  I met a very wealthy business owner that has had great success in the publishing business and when I asked her about her real estate investments she said, "I don't do that just like I don't go and gamble in Vegas!"  It is hard to beleive that even as the "smart money" institutions invest more and more in real estate it is a contrarian view. 

God bless the contrarian for without them we would still be sitting next to a fire living in a cave.

Steve

Steve, I really appreciate your thoughts and the example of the publishing business owner.  It is unfortunately the case with the media that they report the negative and what they report is usually late or behind the trend.  I guess it is inherent to that industry because they are suppose to report what is happening, but very few of them can feel or sense what is happening beyond the numbers published by other institutions.

Real estate has been and will be the vehicle that many investors or wealthy people put their money in because of the many benefits it produces.  I look forward to checking out your blogs and reading your post!

Have a great day and good investing to you!