Real Estate Resurgence December 1st, 2012
A few years ago the housing market crashed. Housing prices rose to extreme levels. Certain mortgage companies qualified people for home loans knowing full well those people could never pay those loans back. Then the bubble finally burst and housing prices plummeted. The resulting recession and stagnant economy made life tough for Americans and others around the world. It became difficult for people to remember: this is just the unfortunate pit of a business cycle. For anyone who believes the housing market will pick back up again (and it’s hard to imagine it won’t) one thing should be glaringly obvious: now’s the time to buy!
Fortunately for everyone, the housing market has started gaining a little momentum. In the first half of 2012, for the first time in 5 years, Zillow’s Home Value Index report showed an increase in home prices from the previous year (+0.7%). Also the FHFA’s House Price Index shows a 0.8% increase in house prices from 2011 to 2012. The biggest increases in housing prices tend to be in the Rocky Mountain States, the West Coast, and the Midwest. The housing market has by no means recovered, but it’s heading in the right direction.
Now is the time to invest. Even if you don’t have the money to buy up a bunch of real estate, you can still invest in companies that do. Investing in real estate now can lead to huge returns in the long run.
Due to the recent volatility in the housing market, and the projected upward trend in housing prices, real estate investing can be profitable in the short run as well. That’s right, flipping houses is becoming popular again! Today, flippers are looking to take advantage of homes that have been foreclosed. Barclays Capital estimates that there are about 639,000 foreclosed homes for sale right now across the country. Lenders (banks) prefer to get cash on these houses right away rather than try to sell them later at market value. Often times, houses will sell to investors at a price below the loan balance on the house. Flipping has become very popular lately and houses tend to be up-bid more than they were a year ago.
Don’t be afraid to invest in the housing market. When things look grim sometimes they have nowhere to go but up.
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