Question Details

Aditya, Home Buyer in New Jersey

Have the property prices in US bottomed out?

Asked by Aditya, New Jersey Wed Aug 11, 2010

Is this the correct time to make a property investment?

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These are all great answers and they target the bold portion of your question. I think the crux of your question though is "Is this the correct time to make a property investment?" Investors make money in real estate in spite of where the current market is, At the top or at the bottom of the market. The answer to your question would be a qualified "Yes." While there is not adequate space in this forum to completely answer your question, here is the "Readers Digest" version. Real estate markets can be as large as counties and as small as individual plats. Each home has to be considered within its potential for rehab costs, time required to renovate and potential sale price (this is a little tricky because you have to project what the market will be when you complete your renovations) . The thing to understand is that it is a combination of many factors that determines if a home is a good investment. If you buy a home for a low price but cannot recoup your renovation costs when the project is complete, it is an unwise investment. If you over renovate or under renovate you can make your investment home difficult to resell. Also remember the cost of money over time is part of your investment cost.

Other questions you must ask before you begin include: Are you in a financial position to have available investment capital? Is that capitol readily accessible and large enough to cover your costs. Do you have a real estate specific plan for your investing? Do you have access to professional resources to assist you in decision making or repairs in those areas where you lack expertise?

Ultimately you create your profitability by buying correctly. You risk that profit by poorly planning or managing your rehab. (finding unexpected repair can quickly eat away projected profit so plan for contingencies) You do not make your profit until you have a successful sale.

The condition of the market does not necessarily determine a good investment, it is the individual home that is the investment. Much like the stock market, the market can be strong and an individual stock perform poorly and create a loss for the stock holder. How much of a return do you want or need to make your investing a wise choice for you?

Join an investors networking group, align yourself with local professionals. Do your due diligence so that you can make wise decisions.
1 vote Thank Flag Link Wed Aug 11, 2010
You will know when they bottom out, 24 hours after they go up again which is precisely the time after they close, which is 30-90 days after they go under contract which is up to 6-9 months after they are listed and appear on the market. Now that I think about it, that is about now.
We will know where the bottom was when they rise, won't we? When to invest in RE depends on the faith you have in the future of the world economy and the local economy-market. How long do you plan to keep the investment? How does return and risk compare to other investment vehicles? If you need a house to live in, anytime is good. If you want an alternative to a bank account paying interest, RE may not pay 1% per year as an investment, but in 10 years it might return more than 10% making it a better choice than the bank, but you will not know for 10 years.
0 votes Thank Flag Link Thu Aug 12, 2010
I thought it did, but my opinion has changed. Only buy if you are in for the long haul. It is not if it will recover, but when. I didn't think the mortgage rates would drop this low. Every new week surprises me.People are having to let their house go for nothing. If you get a good deal, take it.
0 votes Thank Flag Link Wed Aug 11, 2010
Instead of asking if the bottom has been hit, ask if it makes sense to buy now. It is impossible to find the bottom until prices begin to climb. Instead of looking for the bottom look at factors such as interest rates (lowest in recent times if not ever), price (price has dropped by over 20% in many markets), and if the payments would be affordable. There are several other things to consider, like tax advantages, how long you plan to keep the property, and the personal value to you. Consider the fact that one day the bottom will be reached, if not already, and then with inflation and payments your equity will go up.
0 votes Thank Flag Link Wed Aug 11, 2010
Hi Aditya. My opinion is NO, they have not bottomed out. We still have huge amounts of unemployment due to fiscal incompetence by two presidents, the Fed, fraud everywhere on Wall St. The average person that wants to buy a home can no longer qualify for one. This will push prices down further! Inventory is high.

Every time that I write my personal opinion about where the market is headed, I get a lot of heat from others that want to bury all of these negative aspects for recovery. We still have time. Prices continue to fall, I see it daily.


Scott Miller, Realty Associates, Boca Raton, FL
0 votes Thank Flag Link Wed Aug 11, 2010
Great time to buy if you know what your doing. Great interest rates, great values. No one know what the future holds but great oppotunities are knocking right now. Shop wisely. Choose the town or area very carefully!
0 votes Thank Flag Link Wed Aug 11, 2010
There's one thing for sure on values bottoming out - we won't know it until they are on an upward swing. No one can predict the bottom until it's over!
0 votes Thank Flag Link Wed Aug 11, 2010
Although this is very hard to pinpoint, in some areas yes. There are pocket neighborhoods in most counties that are either holding steady, or have shown green numbers(albeit barely) in the last two quarters. With the increase of short sales and decrease of foreclosure homes, values are starting to have an optimistic outlook for the first time since 2004-2005. If this trend continues, more positive values should be the result. It has to be in the right area, so my advise is to do your research before buying or even better, contact a local broker who knows the areas you are considering very well.
0 votes Thank Flag Link Wed Aug 11, 2010
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