2006-06-29 21:22:09 · 4 answers · asked by AntiDisEstablishmentTarianism 3 in Business & Finance ➔ Renting & Real Estate
Not sure, but............
Keep in mind...........
Times and markets are changing!
In California with average homes selling well over $500,000, a 20% decline is $100,000! In any market 'timing is everything'! So, could you afford a loss of 25% of your investment all because of poor timing???
This last up cycle was 10 years in many parts of the country. The downcycle now started in CA, Wash DC, NYC, Vegas and other hot areas of the past are all soft and getting softer.
From 1990 to 1996, the average home in San Diego lost 20% of its' value! The cycle we are now enterng looks like it could well exceed that on the downside!
With all the 100% financing, interest only loans, EZ qualifing etc...even a slight decline will cause many to be unable to sell for the amount due on their loans!
For some great 'insider' articles on the San Diego real estate market, which I believe will apply to any of the hot real estate markets of the past five years.....visit:
http://sandiegofsbo.blogspot.com
http://www.brokerforyou.com/blogger/index.html
http://www.brokerforyou.com
http://www.san-diego-for-sale-by-owner.com
http://www.la-jolla-ca-del-mar-san-diego-real-estate-encinitas-california.us
http://www.la-jolla-real-estate.info
http://san-diego-coastal-real-estate.blogspot.com
http://sandiegofsbo.blogspot.com
http://downtown-san-diego-real-estate-views.blogspot.com
http://www.poway-real-estate.info
http://www.del-mar-real-estate.info
http://www.la-jolla-real-estate.info
http://www.los-angeles-real-estate-brokers.com
http://www.san-jose-real-estate-brokers.com
http://www.orange-county-real-estate-brokers.com
http://www.san-francisco-real-estate-brokers.com
http://www.sacramento-real-estate-broker.com
2006-07-05 06:55:11 · answer #1 · answered by Anonymous · 0⤊ 0⤋
The real answer lies on what you are trying to do.
Are you a speculator/flipper: GET OUT!!
Are you a real true investor/homeowner THERE MIGHT BE SOMETHING HERE!!
I will go against the grain on this topic and here is the reason why:
Following is an article I wrotte back in November 2005 and this still stands:
REAL ESTATE MARKET BUBBLE BURST!!!???
Well, we’ve heard so much from so many different “experts” but we ask how many print media columnists does it take to create a Real Estate market bubble? They really can’t but they can sure create fear on the consumer of a bursting housing bubble.
Most media are always looking for ways to increase circulation, which would equal to profits therefore any story suggesting a bursting bubble is going to attract readers. Not that they write this articles for the sole purpose of inducing fear on the consumer but don’t let media stories convince you that a bubble will burst or even worst become a self fulfilling prophecy.
Ultimately, the consumer is the one that dictates if there will be a bubble burst in the Real Estate market.
Three important facts that guide property values are:
Supply vs. Demand: If supply of housing is greater than the demand, housing values will drop. If the supply is less than the demand, housing values will rise.
(In California the supply has increased and demand has diminished therefore it has forced prices to dip)
Employment: This should be a no brainer. Solid and growing employment provides income for down payment and house payments.
Interest rates: This is very powerful driver in creating and sustaining property values. When the rates are reasonable, most people are willing to make important investments like purchasing a home. With lenders now offering easier loan programs to qualify, there are now many people able to purchase a home.
Now, just because lenders have been offering “generous” programs should not encourage people to go out and obtain any type of loan available. Many loans are dangerous and don’t fit with everyone’s lifestyle and economic situation. Many loan agents have been quick to over qualify borrowers and what’s worst not explain completely the pros and cons of each loan program available.
Rates have been creeping up little by little over the past couple of months and are expected to continue to rise a bit more next year as well.
It could be possible the “bubble” will burst but not likely. The Real Estate market will most likely will slow its rapid ascent, level out and maybe dip a bit. But a big burst? I don’t think so.
Nobody can tell what exactly will happen in 2006 with the Real Estate market or the interest rates. What you can do is get informed and protect yourself against a busting of the bubble. You can sure minimize the damage if there was a burst by planning ahead. How well secured are you in your current job? Your income? Have much equity have tied up with loans? Does the equity you have now along with your savings withstand a dip in your home’s value during the time you anticipate to own it?
Don’t stretch your finances by paying a high price for a home just because you’re stubborn and want to have that home.
And one FINAL thought: If you are looking to invest in Real Estate, this might be the best time for you to do it IF AND ONLY IF you are a true investor looking to invest long term. Real Estate is the BEST investment you will ever make in your life!
If you are a speculator/flipper I suggest you dont do anything right now, you will end up loosing money.
2006-06-30 09:51:15 · answer #2 · answered by SCCRealEstateUNCENSORED.com 3 · 0⤊ 0⤋
Interest rates are still going up and home prices are starting to flatten out in some areas. Rumors are that the next rate hike will be half a point instead of the usual quarter.
2006-06-30 06:33:08 · answer #3 · answered by ohnoslen 3 · 0⤊ 0⤋
the market is bad right now, but is always changing
2006-06-29 21:26:15 · answer #4 · answered by :Phil 5 · 0⤊ 0⤋