Real Estate
The Next Real Estate Boom
- Details
- Category: Real Estate
- Published on Thursday, 17 March 2011 07:06
- Written by Steve Pender
The Next Real Estate Boom
It's coming!
It's not going to be a big one, but a mini-boom is coming. After the crash and tumble of the last 5 years where housing prices fell over 50% in many places, prices have stabilized, and with foreclosures running toward the end of their route, prices could start climbing as some people start buying again.
Investors have already been snapping up properties, when their capital allows,(many of them lost their shirts in the bust), but prices haven't been this low in 30 years.
The boom may be a slow one, so don't look for a quick profit. Some of the things slowing down the price increases will be bad credit of former owners who lost their houses to foreclosure,(a 7 year wait for credit repair), possible higher interest rates keeping potential buyers out, slow job growth, and locally- industry driven locales that will not see the return of business for many years. Tourist destinations may encounter slow growth due to high gas and airfare prices.
Driving up prices will be higher rent costs as more people need to compete for rentals, but keeping that down will be the glut of empty houses fed by a abundance of housing built right before the last crash.
What time frame are we looking at? Well depending on inflation, higher inflation will slow business growth and reduce individual buyer's savings ability, it could be 10 to 20 years before houses reach there pre-bust prices. But starting now, barring any other disasters I would say that real estate has bottomed out in most areas of America, making now the time to buy your family home, if you don't already have one. Just be sure that's where you want to live for awhile because it will be a buyer's market for at least another 5 years.
Some people may be thinking this is not be practical advice because of bad credit from a foreclosure of their own or job loss. Rest assured it wouldn't be easy to get a loan, and truly if you can not get the right terms there is no point in signing your life away (again?). There are ways though, for instance if you can come up with 20% down most lenders will not question bad credit. 20% of the average home price of $120,000 is $24,000, about the average middle class one year salary.(Yes it's fallen too.) Another way would be to get a friend or family member to get the loan and give you a lease with the option to buy or have them carry the loan for you. There are other ways and I will be publishing an article in the near future on as many ways I can find to purchase a house with bad credit in this tight money climate, so look for that.
Anyway good luck to you all, and remember to buy low and sell high.