Know the Trends
Wednesday, March 10th, 2010As in any market, the investor must stay on top of market conditions and know the industry trends. Real estate market investors follow local and national mortgage trends, commercial and residential real estate trends and must stay abreast of all government Federal Reserve and Treasury department initiatives. For the informed investor, the residential and commercial real estate markets are loaded with opportunity.
In a recent report from Trulia.com, one of every four homeowners with a property listed as of August 1, 2009 have reduced their asking price at least once since putting the property on the market. 24.4% of homes currently for sale reduced their price in July. This marked an increase from the 23.6% of homeowner reductions in June.
The average discount was 10% of the asking price or $40,173 of a median priced home. Trulia co-founder, Pete Flint, said, “Competition heats up in the summer as more inventory comes onto the market. Sales are increasing but prices are still falling.”
For new real estate investors these are encouraging signs. As markets continue to trim supply, demand begins to mount. There is still time to get in on the low end but as the National Association of Realtors affordability index indicates, the time is right.
With low purchase prices, reasonable interest rates and government incentives all in place, investors are poised to add real value to real estate portfolios. Trulia estimated that housing asking prices for current listings have declined by $27.8 billion since the homes came on the market. $700 million of those reductions occurred in July.
The states with the biggest price reductions are California, Florida, Nevada and Arizona and Illinois. These states have been hardest hit by the recession but may provide the best opportunity for short and low cost investments with steep upsides.
