Aren't you sick of hearing negative news about the real estate market?

By
Real Estate Agent with Realty World Executive Services

Although it is very unfortunate that a lot of people have lost their homes in this market through foreclosures and short sales, this is the time when first time buyers should jump in and buy. Waiting too long might cost you to miss the boat again. Times like this don't come around very often. Interest rates are still very low with one digit numbers. Remember the 80's when interest rates got close to 20%. Low interest rates translate to more home affordability and increase the buyer's purchasing power. Waiting to see if the market is going to decrease more could end up costing you more if interest rates start heading up. Home values have already been adjusted back a big percentage depending on the local area. More people can now afford the same house that was listed couple years ago. I already started seeing investors coming back to invest in the US real estate market and a lot of them are foreign investors. If this continues it will lead to more demand, less inventories and higher prices. Overall investing in real estate is a great venue to building wealth. Just remember these quotes:

  • In 1947 when the average price of a home was under $10,000: "The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline" Time Magazine
  • In 1969 when the average price of a home was under $30,000: "The goal of owning a home seems to be getting beyond the reach of more and more Americans" Business Week   
  • In 1981 when the average price of a home was under $100,000: "The era of easy profits in real estate may be drawing to a close" Money Magazine
  • In 1985 when the average price of a home was above $100,000: "If you are looking to buy, be careful. Rising home values are not a sure thing anymore" Miami Herald
  • In 1986 when the average price of a home was above $100,000: "Most economists agree... a home will become little more than a roof and a tax deduction, certainly not the lucrative investment it was..." Money Magazine
  • In 1993 when the average price of a home was a little under $200,000: "Financial planners agree that houses will continue to be a poor investment" Kiplinger's Personal Financial Magazine
  • In 1996 when the average of a home in San Francisco was $250,000: "A home is where a bad investment is" San Francisco Examiner. Ten years later the average price of a home in San Francisco was $750,000. Was that a bad investment?

  What would I do if I have some cash now?

Invest ... invest ... invest in real estate.

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Rainer
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Linda Tremblay
Long & Foster Real Estate, Inc, PA License #AB065488 - Doylestown, PA
Associate Broker - Bucks County, PA Real Estate Services
Been tired of the negativity since it started.  That was when the market was hot and they were saying there was a bubble about to burst.  When we were in a sellers market, they did not stress not to buy homes that high.  Now that in Bucks we are in a stable market, they tell the buyers not to buy unless they can offer 50 percent of list price.  Give me a break! 
Apr 01, 2008 11:53 AM #1
Rainer
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Peter Nikic
Broad & Bailey Realty LLC - Valhalla, NY

nice! I tell this to friends and investors all the time. I just can't figure out why people are so reluctant to beleive that it will always continue (just maybe not at the same pace).

Of course inflation plays a big factor in all of this. I also use inflation as a continual source of price increases.

Here's how I use it:

If you put 25% down on a property and real estate appreciates at the same level as inflation (aprox 3% per year). Then your return on your money is actually 12% because the 3% increase is on the entire property, not just the 25% down payment. At 3%, your property will double in 24 years (72 Rule), but your cash will quadruple. 

Apr 01, 2008 11:57 AM #2
Anonymous
Mark Johnson
YEA! Someone is saying what should be said! Buyers should know that it is a wonderful market for buying and sometimes our own people ruin the momentum. We need to band together and support one another in this trying market. God Bless!
Apr 01, 2008 12:21 PM #3
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Fred Griffin Tallahassee Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

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