Housing Bubble Watch 2013

Besides working for a property management software company and providing tenant screening I am a real estate investor and I have been searching for local investment opportunities in the housing market since around 2008. In Grants Pass, OR (my locale) the housing market was very near the bottom of the crash by the end of 2009, there were plenty of properties on the market, prices were very negotiable, and the competition was light. Fast forward  to 2011 and the number of houses on the market dropped dramatically, prices were not as negotiable, and most of the time another more aggressive investor would beat me to an offer. Current day 2013 something very different is happening and I think I may have run out of time to find any more properties that are going to pencil as profitable rental properties (darn). Since positive cash flow is the name of the game I can't reasonably purchase another property in southern Oregon at this time.

Since 2008 I have been telling my investment partner that this very well could be a once in a lifetime opportunity so we should snatch up as many undervalued properties as we can afford! But with all the buzz across the nation about the housing market heating up and sweltering in some locations it makes me wonder, will it really be a once in a lifetime opportunity or is this just the beginning of yet another bubble?  This a debatable topic indeed, The Economist has reviewed the 20 largest US metro real estate market and concludes data does not support the thesis that a new housing bubble is forming. However, several other analysis have been published by Global Economic Intersection that do indicate if growth continues at rates as high as 50% over the next year, then these homes will be over-valued and there will be another bubble. There are differences between this run-up in prices and the housing bubble that preceded the financial crisis, said Gary Thomas, the Realtors' president. "The boom period was marked by easy credit and overbuilding, but today we have tight mortgage credit and widespread shortages of homes for sale," he said. 

It will be very interesting to watch the trends over the next couple of years. I guess time will tell if we are heading for another bubble or if we are just recovering (quickly) from an era of undervalued homes. It would be unprecedented but who knows. What do you think, are we heading for another housing market crash?

 ---

Dulcey is a member of Rentec Direct who provides Property Management Software, tenant ach payment processing, Rentec credit, criminal, and eviction screening for property managers and landlords.