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Annamaria Diangelo

By Annamaria Diangelo | Broker in Brooklyn, NY

Real Estate Matters | Betting on the right time to buy as interest rates jump

Paul J. Richards/Getty Images

Paul J. Richards/Getty Images

"There’s no question that the real estate market is healthier than it has been in years, but the headlines aren’t quite giving consumers the whole story. While existing home sales, new construction sales and home prices are trending up, they are still below their pre-recession peaks, noted Amy Crews Cutts, senior vice president and chief economist for Equifax.

Single-family housing starts are still down around 60 percent from the pre-recession peak, while existing home sales are still down about 38 percent and prices are down roughly 20 percent.

“Even with large percentage gains in housing measures, all major indices of housing market vitality point to a long recovery yet to come,” she said in a live Webinar on the housing market hosted by Ilyce. (Full disclosure: Ilyce also serves as the managing editor for the Equifax Finance Blog.)

What’s keeping the housing market depressed isn’t a lack of buyers but a lack of inventory. There simply aren’t enough houses to buy. Home builders can’t build homes fast enough: There aren’t enough building materials in some communities, and others are experiencing a shortage of construction workers."

Full story: http://wapo.st/150MNrr


By dkjules,  Sat Jul 6 2013, 11:53
While this may be true it is still far from the complete story and can potentially lead one to draw incorrect conclusions on actual events in the market and its true meaning. Yes it is correct that there is a shortage of inventory, but that begs the question Why? It simply because the Hedge Funds and various Vulture Funds around the globe realized three years ago that American real estate was a better investment than gold.

They bought up and are still buying everything they can get their hands on. On average they were getting a 12-15% cap rate coupled with a projected 100% ROI aat the sale of the property in a 3-5 year period. So in four years they would have realized a potential of 160% ROI. Now which stalk give that kind of return.

However, the problem for the market will arise in this 3-5 year selling gap when they are prepared to cash out. Why? Simply because of the re introduction of inventory which was artificially removed. though i am sure they have a plan for managed re-introduction so the markets remain stable but things never
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