Is this the best Real Estate Investment market we will in oujr lifetime?

Asked by Matt Andrews - Real Estate Investor, Clearwater, FL Mon Jan 3, 2011

Help the community by answering this question:

+ web reference
Web reference:

Answers

21
Debra B Albe…, Agent, Port St Lucie, FL
Tue Jan 4, 2011
BEST ANSWER
In an word...YES...

Home affordability and low interest rates are driving the market. The tipping point has been reached and prices are trending up.

We are in a slow and steady mode.

Our properties that are well priced are getting multiple offers, that is all properties, those that are distressed sales AND those that are not.

It is the buy low sell high axiom at work.

Debbie Albert, PA
Keller Williams of the Treasure Coast
Web Reference:  http://www.ronanddebbie.net
1 vote
gabriel palo…, Agent, Pompano Beach, FL
Mon Feb 14, 2011
Matt,
Each day is a clarification of things to come or to be expected in the housing industry. The one thing that you asked that rings true in your question " in our lifetime" Will housing as an investment will it never be the same?
It is less likely a home will be within reach for many in the future
Either because of their capabilities or natural desire and circumstances .
Renting will become an alternative and persuasive argument for many who need to see themselves not as secondary citizens because they do not own a home. . Housing will evolve over needs and issues of not just over size, affordability or financing but mostly of relocation in need of available job opportunities.

Investments regarding these factors will provide new opportunities. Weather one contributes to the industry by buying or renting should have the same encouragements and compensate and reward their choice fairly.
Over the past decades homeowners were benefiting from savings on their interest payments which became tax deductible. In light of the changes in our industry the question remains how could millions that cannot afford to buy a home be given the same benefits and tax deductions from their housing expenses.
Unless we approach housing as a necessity and prices to adjust to those needs . the benefits once viewed in ownership will not favor it as an investment but a luxury that if weighed in the practical sense may not be for everyone.
2 votes
Robert Nowak, Agent, Mount Prospect, IL
Tue Jan 4, 2011
Did the stock market look good in October of 87? Lehman days? If you had the guts to buy then when things looked their absolute worst you would have done great "in the long run" Some housing markets are coming back, some will take longer. To answer your question you need to qualify a time period. 1 year probably not a good investment. 5 years probably a good investment. 10 years probably even better. Only time will tell. Only guarantee is the is the old saying death and taxes! Good Luck.
2 votes
Julia Fishel, Agent, Dunedin, FL
Mon Jan 3, 2011
In three simple letters - YES!
Web Reference:  http://pinellaspeach.com
2 votes
John Bennett, Agent, Orlando, FL
Mon Jan 3, 2011
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way - in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.
2 votes
gabriel palo…, Agent, Pompano Beach, FL
Mon Jan 3, 2011
Sandra is right. I remember the Denver market crash. My daughter was in the Air Force Academy and we visited frequently. We could have bought a beautiful four plex for less than sixty thousand dollars.
i still remember it was in the Garden of the Gods. I wonder what it would costs today in this market?

There are no regrets Mat. . It would have made little sense buying that property no matter how good a deal it was. I had no purpose for it. The best investments are fulfilling a need. Either it is going to make money for you or you are going to enjoy it. As you know there are no guarantees in life . You take your best shot whenever the opportunity is right.
For you today may be the best time. Is it?
In time you too will know if it was the best investment or just the wrong time. Just like Sandra said you need to be ready and willing and have the money and the foresight but most important to have a definition for the purpose that will make it a great investment..

Good Luck
Gabe
2 votes
Sandra Mathe…, Agent, Grand Junction, CO
Mon Jan 3, 2011
Probably depends on your age...but in the 26 years I have been in real estate I only saw one other opportunity when I was a Realtor in Denver and their market crashed 1987-1990. Wish I would have had the money and foresight to invest then.
Web Reference:  http://www.SoldOnFernley.com
2 votes
Dan Chase, Home Buyer, Texas City, TX
Wed Nov 2, 2011
Low interest rates actually make this a horrible time to buy. Interest rates are actually causing prices to be higher than they should and will be.


Just going from 5% to 7% interest rates will remove 23.7% of buying power. When roughly 1/4 of a buyers purchasing power is gone and their income does not rise how can house prices not be forced down by about 1/4 to meet the buying ability of buyers?

Consider below:

If my $1,000 a month payment can buy a
$200,000 mortgage at 4.25% paying $983.88 monthly or
$110,000 mortgage at 10% paying $965.33 monthly or
$_47,000 mortgage at 25% paying $979.75 monthly explain again how inflation with interest rate changes drive house prices upward as they appear to be driven further down.

Here is what really happens.
At 4.25% a 30 year $100,000 mortgage costs $491.94 a month
At 6.25% a 30 year $100,000 mortgage costs $615.72 a month
At 7.75% a 30 year $100,000 mortgage costs $716.41 a month

That does look like buying at lower interest rates does save money. But does it really make sense? Could we be missing a critical piece such as buying power dropping as interest rates rise?

Lets look at this the other way.
A 30 year $100,000 mortgage costs $491.94 a month at 4.25%.
A 30 year $80,000 mortgage costs $492.57 a month at 6.25%
A 30 year $69,000 mortgage costs $494.32 a month at 7.75%
1 vote
James Gordon…, Agent, Hamilton, OH
Sat Feb 12, 2011
Matt I don't know. If Fanny and Freddie go away it could be a great market for investors. Imagine if every home loan needed 20-25% down.
1 vote
Alma Kee, Agent, Tampa, FL
Tue Jan 4, 2011
Hi Matt,

I think we may see some more downward prices...unless something creative is done to spur demand for Real Estate or there are easier lending requirements.

There are many buyers who would love to take advantage of these discounted prices but they have to be able to qualify for their existing house (that will become a rental) and their new home purchase. Until these lending guidelines ease up or some other creative event happens (flat tax and opening up our borders to high net worth immigrants), I don't see any light at the end of the tunnel--sorry to say!

Also we have ever increasing unemployment so that is further exacerbating the Real Estate debacle.

All the best,
Alma
1 vote
Tom Priester, Agent, Tequesta, FL
Tue Jan 4, 2011
Dear Veek,

As we start 2011 it is certainly time to start looking ahead and yours is a great question to ponder as we all finalize our goals for the coming year. I am so excited to put the wraps on my sales updates for December and hope that I will be able to report an increase in median prices in Jupiter and other local market areas for the first year over year increase in 5 years. Too close to call just yet.

It is also so important to understand that it has been two years since we have seen any significant movement in median prices. As an example I give you the median sales prices in Jupiter;

January 1, 2009 median price was $330,000
January 1, 2010 median price was $320,000

As of my December median prices were hovering around $325,000.

Investment grade real estate has nowhere to go but up and those with available cash should be investing fully at these prices. The returns are great and buyers are lined up to immediately put the properly priced properties under contract. The luxury home market still has an excess inventory and this will continue to hold prices down in 2011.

Interest rates are a huge story as we have seen such a rapid rise they need to be watched closely. I am hoping we can see rates stay around the 5% level+/- and 2011 should be another good year here in southern Florida real estate.

Remember there are 76 million "Baby Boomers" out there and about 25% have their eyes on Florida for a retirement home. Also, remember there is a huge built up demand from potential buyers who have sold short their home over the past few years. They are forced to wait about 2 years+/- to get financed again but they soon will all be coming to the market.

Those looking to buy, who want to be rewarded by these prices should seriously consider acting now or they may in fact be paying higher prices before they know it.

Best wishes for a healthy, happy and prosperous New Year!


Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
tom@tompriester.com
Web Reference:  http://www.tompriester.com
1 vote
John Bennett, Agent, Orlando, FL
Mon Jan 3, 2011
best or worse for sure- mhow do we know
1 vote
Mark LeMenag…, Agent, Lake Nona Orlando, FL
Fri Nov 4, 2011
Does is matter? Best implies that you can time the market and we all should know that that is impossible. Is this a good time to invest in Real Estate? Yes, it's a very good time. That's why all those foreign nationals are buying up Florida.
0 votes
John Bennett, Agent, Orlando, FL
Thu Nov 3, 2011
Dan, Don't believe QE1 nor QE@ has kicked in yet, Thank you FED. When the Velocity of the money starts churning then we will see double digit inflation - 1012 - 1013 - FED has been covering it up right now but that game will soon end.

I think we agee in end result - it's going to be ugly - very ugly!
0 votes
Dan Chase, Home Buyer, Texas City, TX
Thu Nov 3, 2011
John, if incomes rise by 25% every time interest rates go up by 2% prices can remain stable.

We know interest rates can rise (and fall) quickly per the federal reserves whims.

Now in this reality who thinks incomes can jump that fast? It will not happen. Good theory, bad reality.

QE1 and QE2 have already had an effect. You notice it every time you buy gas or food, or other commodities. The problem is the money supply was expanded greatly. Once that extra money starts to get spent as those dollars stop being stuck in bank vaults inflation will hit hard and heavy.
0 votes
Steve Vennem…, Agent, Pine Springs, MN
Wed Nov 2, 2011
some Real Estate markets a good and some may still have some work to do with pricing.
0 votes
John Bennett, Agent, Orlando, FL
Wed Nov 2, 2011
So Dan, what happens if incomes rise? Woops!
Tell us how QE1 and QEII has effect here?
0 votes
Alma Kee, Agent, Tampa, FL
Wed Nov 2, 2011
Great answer by Dan Chase! Never really thought about how the current low rates can prevent price appreciation if the rates go higher. That should definitely be factored into the analysis when buying.
0 votes
gabriel palo…, Agent, Pompano Beach, FL
Wed Nov 2, 2011
Not if you live long enough to regret it.

Loosing is like winning if money spent makes a better inheritance.
0 votes
Alma Kee, Agent, Tampa, FL
Wed Nov 2, 2011
If our leaders in Washington actually do something right by passing the new Bill in the Senate that would allow immediate Visas to wealthy foreign nationals, we may finally be at the bottom of the market!

The basic details are $500k ALL CASH investment in real estate with at least $250k spent on the primary residence will give a VISA (not a work visa so they can't work). Additionally these cash rich individuals will purchase other things so it should spur the economy.

Now if they would also couple this with removing all taxes and going with a national sales tax, we will have even more higher net worth immigrants and corporations moving here (and providing needed jobs) to take advantage of our lower tax burden!

All the best,
Alma Kee
http://www.SoldOnTampa.c
0 votes
Debra B Albe…, Agent, Port St Lucie, FL
Wed Nov 2, 2011
In Port Saint Lucie Florida, the answer is YES - withour a doubt. Prices are down and Stabalizing. Some areas in St. Lucie are rising. Sales have been up 5 months in a row. Many sales are cash. Those that are not have financing at historical low interest rates. It has never been a better time to buy Real Estate in St. Lucie County Florida.

Debbie Albert, PA
Keller Williams Treasure Coast
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more