Realtytrac sent an article to me with this title and i responded to them.
“I must respectfully disagree with your article. I have been an investor in several markets for 30years and have been through several bubbles with their subsequent diffusing. I sold everything in 2005 because it smelled like a bubble. This market does not have any resemblance to a bubble.
Prices jumped up a lot in the last few years because of the hedge funds artificially pumping things up. They are not doing that much anymore so prices have moderated. We are not getting the huge jumps We are slowly heading towards a normal market which is about 4-5% increase pr year.
The mood of the people is positive: Jobs are up, income is up and many potential home buyers are ready to act. In addition, the boomerang buyers who were not able to buy in the past because they had a short sale, foreclosure or bk are now eligible to buy,
The supply and demand equation is still lopsided: There is not enough product out there to fill the demand. New home sales are even down this month.??? In addition, many of the millenniums will soon want to buy instead of rent as rents keep climbing. Just wait until people realize that the feds are serious about raising rate and that today’s rates are not the norm even though they have been around for a while. Those of us who have been in the business for a long time remember when we thought that 8% was the norm.
Those “investors” you quoted are not the bread and butter of the industry. They are negative on the market and did not make the money they thought they would make because they bought the cool aid and paid too much for their investments by listening to realtors and bankers. All my students know that you can’t get a deal if it is listed. You have to approach fsbos. True it’s harder to find your own deals and it takes a lot more effort and time but I am finding that my students who are doing this and working at it, are finding deals that are cheap enough to allow things to go wrong: bad appraisals; repair overages.
True some markets are way overpriced and are susceptible to bursting but real estate is going back to the way it used to be: totally regional. I remember when it crashed in L.A. at the same time it soared in Denver. The only time all markets when down at the same time was when something happened that affected every area of the country at the same time: Tax changes in 1986 and mortgage crookedness in 2005 to 20008. That is not the case now. Unless something drastic happens outside outside of the real estate market itself (god forbid) we should shuffle along nicely.
Affordability is still nowhere near the lows of the last downturns. We have a long way to go for that. If prices are not climbing with “irrational exuberance” how can we get to that point soon?
So if you research your market carefully; be careful not to overpay; and don’t listen to the doomsday nonsense, you can still make money buying and flipping. Of course buying and holding works too. (think how happy you will be when interest rates go up and you are still holding properties with a 4% interest rate.)”
