I wanted to get the opinions of the guru’s on this one. What are the predictions for when the market may change back to a sellers market?
I know certain factors are to be considered, i.e., economy, jobs, available housing, etc…
But just want to know your thoughts on a timeframe.
dlmcgill
Hi,
Tafooooty, Tafooooty, Tafooooty!
What market? What State? What County? What City or Town?
Some US markets are doing real well right now, property is appreciating and sellers get asking price or very close to asking price, then again there are markets that are still adjusting down, where values continue to dwindle and where there is economic dispair!
Every market is different! Each market has specifics which directly effect value’s! Each market has financial and socio economic factors that predetermine that change! Each market has job and employment factors that determine spendable cash flow and affordability!
Sometime after May 10, 2011!
GR
hello,im new member in this forum.
LoL Gold River,
I’m in Southern Maryland, which is about 15 minutes outside of DC and 20 minutes outside metropolitan Virginia.
This area is still yielding asking price for the most part unless its a fixer upper of course.
However, there is a lot of inventory in sourther Maryland. Unlike DC and metropolitan Virginia. I guess my real question is when can buyers and investors expect a decrease in inventory nation-wide? And I get that each market is different but I’m talking on a whole. And I understand that its basically just a guess :biggrin
dlmcgill
If you feel like reading … this is an article I wrote and published on eZine articles at the beginning of 2010 :biggrin
Real Estate in 2010 had followed a pattern that was expected: as mortgage rates and homes sales have dropped, inventories of unsold properties have risen. The inventory currently on the market is only a portion of a larger inventory of REO (Real Estate Owned) by banks, which is held back and released slowly over a period of time, in order not to cause an even greater decline in housing values.
Unfortunately, real estate trends of 2010 will continue into 2011, following the same general pattern, with a slow recovery expected towards the end of 2011.
Some speculations predicted that the recovery would have started towards the end of 2010, but with new problems in the international economic markets, it looked like we took a double dip into the current recession. However, economists state that a double dip recession is unlikely, although spending and investments in the established economies have been challenged by emerging economies, like India and China.
Real Estate Trends are following the larger economic picture: the mortgage crisis has indeed caused a lot of turmoil and scars, which have created a domino effect with high unemployment, low consumer spending, consumer credit slow down and weak housing markets.
The large number of homeowners, who have lost their house in foreclosure, are not going to buy another property in the near future, because of the impact of the foreclosure on their credit (banks will not even consider a mortgage for a borrower for 4 years, if he/she had a foreclosure, 3 years for FHA loans,) therefore there is a new population of renters.
Investors, who have access to capital, can acquire homes for 60 cents on the dollar or less, via short sales and REO. They in turn keep these properties as rentals and investments, waiting on an inevitable economic recovery and increase in values.
Other Real Estate Trends worth mention are in the arena of commercial properties: commercial properties have followed a different pattern than residential real estate, holding on to the market value longer and only in this last year have started to lose their balance, as large mortgage notes have become due and refinancing has become harder. Some great deals are available in commercial real estate investments, from larger apartment buildings to shopping centers.
This is definitely the time to buy and it will continue for another couple of years. Inventory in residential and now commercial real estate is abundant, seller’s contributions as allowed are more available and the Government (especially HUD) is providing grants and incentives not only to homeowners, but also investors, in an attempt to expedite the housing recovery.
Today is 05/12/2011 - I predict it will be a sellers market in 3 years - so by 05/12/2014 I bet it will be hot again, in Texas anyway. =)
Motivevatedceo
That can’t happen, remember the world is going to end in 2012. I’m convinced the ancients were able to foresee the possible re-election of our current prez and the 445 henchmen that are as inept at their duties as the head idiot.
Until a ton of issues are addressed properly, it’s not going to happen with the current crop of idiots, so vote out any and all incumbents (very few exceptions), and start calling for some constitutional amendments that are sorely needed, and correct the election laws to allow the control of two parties to be changed and allow good people to represent us without being puppets to one of the parties.
In the meantime the real ability of the average wage-earner to buy the average priced house in real dollars is going to keep declining which effects the market from the low dollar end to the high dollar end. The cure is a ton of factors that need addressing and not temporary artificial supports that only delay the cure.
In this area (SE New Mexico), there is an ever increasing shortage of rentals. The “For Rent” columns in the newspaper dropped from 3 or 4 columns to less than 1 column.
No new houses are being built. So just like the value of used cars going up-- due to the tsunami/economy shortage of new cars–rental prices are going up.
Everyday there are new foreclosures listed in the newspaper in this small town. When I take my dogs for a walk I see dark houses in every block. Houses unrenovated, unrented, un-lived in, unloved. They are not on the market.
Lots of fraidy-cat investors are not buying and renovating: “We don’t know what’s going to happen!” Only the brave are out there buying, renovating and getting top-dollar rents. From those who have jobs, because some people, indeed, are out of jobs. Hunkered down, not doing anything.
Housing prices, and numbers of houses sold continue to decline. This area has always been a year or two behind Arizona and California and Nevada. I predict it will be 18 months until it bottoms out.
Then the people who have jobs and are renting will think, “Wait a minute! I can BUY for a smaller payment than renting! I am gonna buy!” This will start a gradual leveling out of homes on the market.
The time to buy is now. If you look at it, make an offer, no matter how ridiculous. You might get it.
I like the investor who wanted to build up the million dollar portfolio of paid-off rental homes. To be sold someday. When the market inevitably goes up again. That is how to build a future.
Furnishedowner
Wow! This was great reading. I welcome all of your comments. Keep em coming.
dlmcgill
I observe today that more brokerage firms focus on agents higher standard and higher level of service than competitors.
Double dip, and when in late 2013 we come out of this and dust ourselves off. We are at the 50% mark of the highsof '08
As long as the real estate market exist you can always make money if you educate yourself on what is working. Right now a lot of our deals are mortgage assignments and lease options with buyers that have cash but can’t get a loan. Not my favorite strategy but i’ll be darn if I try to tell the market what to do. I go with the trend and its working been flushed with cash!!!
All I concern myself with is buying at such a deep discount so that whatever happens, I can do something with the property and still make money. I am not going to try and ‘predict’ what is going to happen, I am just going to make sure that I cannot lose, even if the worst happens.
:beer
For those in the buying mood…www.homepath.com lists all the Fannie Mae REOs but many advise that these prices are still inflated. There is still some bottoming out to be come.
I prefer to wait and put my money elsewhere for now.
I believe in order for the housing market of the 2008 levels will take until 2013 - 2015. Why? All those who took short sales, strategic defaults, and foreclosures will have to wait 5 - 7 years for their credit to get to a point in which they can borrow again for a house.
Tg
In most markets prices probably dip another 5-15% but the fact that if your looking for longterm buying or cashflow rental, you will get the pricing now. its like saying I will not buy a stock for investing because I think in 2 weeks the stock will go from $45 to $42 but yet in 2years I think it will be a $60 stock. Prices go up and down. What happened before will never happen again. Bank on a modest 2-5% a yr when market rebounds with some flat years. Babyboomers know best. You bought a home and lived it in for 40 years. Raised the family, etc. Today people want to buy and sell in 2 or 3 years, take profits and what, buy bigger for same mortgage amount.
Recent court decisions and actions against the courts will effect what happens for real estate investing in the near future.
http://www.bloomberg.com/news/2011-01-21/faulty-foreclosure-case-in-massachusetts-high-court-may-hurt-home-buyers.html (Bloomberg) reports Faulty Foreclosure May Mean Massachusetts Buyer Isn’t Owner and the buyer has a clouded title.
http://www.zerohedge.com/news/guest-post-houston-weve-got-problem-bevilacqua At Zero Hedge, Tyler Durden goes into the many ramifications of this.
according to marco rubel, San Diego is already on the incline again.
I’d be saving cash though…there is still one more major crash coming.
Why…my sources at fannie mae say they have only released 25% of their foreclosures to market so far…
Which means we have 75% to go…
Happy house hunting!