Housing Crisis: Is Now the Right Time to Invest in Real Estate?

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Here's a collection of posts from the blogosphere recently that look at the housing / mortgage crisis and whether it represents a good time to invest. I recognize that this crisis represents a lot of heartache and pain for many people and do not wish to make light of that, however as investors we must consider whether now is a good time to buy.

Will We Know When The Market Turns?
If you think that the market is going stay where it is you will have no trouble finding the data to support that prediction. What usually happens in any market, stock, bond, commodities, etc., is that the markets turn without very many …

California Housing: Buy One Home, Get One Free! Really!
Posted By:Diana Olick. If you buy one of Michael Crews Development’s luxury homes, priced at around $1.6m, you get a 2000 square-foot cityscape row-home worth $400000 for free. The luxury home is in San Pasqual Valley, the row-home in …

HOUSING: Foreclosure crisis to grow before it shrinks
Just as April’s sales data was the best in months and provided some encouragement for real estate agents, the month’s huge foreclosure numbers offered more ammunition to housing market bears who see San Diego County’s housing recession …

Phoenix Real Estate - It’s a Sellers’ Market for Bank Owned Homes
We now have a sellers’ market in the REO world - 4,054 active listings with 910 closed sales over the preceding 30 days adds up to an absorption rate of 4.45 months. Five to six months is considered balanced, anything under is a sellers’ market.

Record Foreclosure Rates Could Mean Cash in Your Pocket
With the mortgage crisis in full swing, homes are going into foreclosure left and right all across the country. In 2005 there were 850000 foreclosures, with the number of foreclosures increasing…

Housing Market Situation Spiraling Out of Control
The sheer proportions of the foreclosure situation, which has seen the rate of foreclosure surge by 65% in the past year, are leading many to predict that the worst won’t be over until 2010. All signs are pointing to the fact that there …

Real Estate Outlook: Forecasts from Top Bank Execs
Speaking at a private financial conference in London last week, some of the top executive of America's biggest banks were moderately upbeat about where we're headed in housing and mortgages.

Number of Foreclosed Homes Keeps Rising
By JAMES R. HAGERTY June 2, 2008; The number of foreclosed homes owned by lenders continues to rise despite signs that they are increasingly willing to slash prices to sell those properties. Lenders and investors in mortgages …

Where the "Hot" Real Estate Deals Are - Now's a Great Time to Buy
Wilmington, NC (PRWEB) May 20, 2008 — If you've been contemplating that second home, condo, or permanent vacation, experts say now is the time to buy real estate. In April 2008, American Express Publishing and the Harrison Group's Annual Survey of Affluence and Wealth in America revealed that 77% of the wealthiest people in the country believe real estate is a "real opportunity" now. Forty percent said they plan to buy …

Did These Buyers Get a Deal?
The LA Times real estate section on Sunday carried a story about a surge in sales of bank-owned properties, primarily in the Inland Empire. Prominently featured were Aimee and Cory Brown, who snapped up an REO in Murrieta.

Through the floor
From Economist.com - America's house prices are falling even faster than during the Great Depression. AS HOUSE prices in America continue their rapid descent, market-watchers are having to cast back ever further for gloomy comparisons.

A few closing thoughts:

1. Remember the fundamentals: do your research considering supply vs demand, invest rather than speculate, let the numbers guide you, and make sure you have a foundation of cashflow to support your investments (now more than ever).
2. The question of whether it's a good time to invest depends, in part, on your strategy. eg. now is a time for buy and hold investing rather than flipping.
3. Foreclosures equate to higher rental demand. In other words, all these people that have been losing their homes are going to need to rent from someone.
4. A crash of this magnitude is not common which suggests it is a unique opportunity. There is a lot of noise in the discussions surrounding this topic. For some clarity why not tune into what a few respected experts are saying?
5. Prices may not recover immediately but if you invest so that cashflow will allow you to hold an under-valued property it may be a very good long term investment. Finding wholesale priced property is certainly easier now than during a seller's market.
6. It takes a very clever investor to time the bottom of the market perfectly - don't let that freeze you up; give yourself permission to act either side of the bottom. Invest based on strategy, numbers and fundamentals rather than perfect timing.
7. Don't treat all markets as one large market with the same dynamics. There are still good places to invest and other not so good places. This tool may be of interest - www.markettimingmaster.com/webcast
8. Don't assume all houses are undervalued. Do your research.
9. Don't lose your head - FUNDAMENTALS!

 

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