Has The Real Estate Market Hit Bottom Yet?

By Carmelo Rosario

It is amusing to me to hear the variety of opinions on the economy. It's funny how "experts" seem to emerge onto the scene while people grope for answers that would, hopefully, reveal a ray of hope. Nonetheless, our economy will do what it will do regardless of what the pundits predict.

Around the first quarter of the year the country saw a steep decline in the retail values of the housing market. In fact, it happened to be 60%, and even though the 2nd and 3rd quarters had minor gains, it was only a slowdown of the overall process. Today, realtors are predicting that there will be a slow steady rise in home values. According to them, it's smooth sailing from here.

Let's examine this line of thought. Better yet, we will look at the facts and see whether or not these guys are really in touch with reality. Most of us have heard of the principle of "supply and demand." It's really very simple. Price is predicated upon the demand for a product balanced by its availability. Back in spring 2007 potential buyers began to hold back after observing a winter where over-inflated home prices were no longer inflating. When the seasonal market opened in the 2nd quarter buyers were now reluctant to pay prices without regard for the usual cautionary considerations like before. It was a bit of a sobering time for many. Since then deflation has been the trend.

Now, traditionally families prefer to move during the school summer break. How many are content to transfer their family's residence once school is back in? Not most. Hence, there is greater demand during this time and prices are logically driven upwards.......even if only a little.

After we saw a greater demand, the banks decided to hold the flow of foreclosures that surfaced. You would think that since these were held back the market values would fall. The truth is it did happen, and lowering the supply allowed the demand for each real estate investment to rise for cash homes buyers.

So what exactly does this mean for the future? Well, once school rolled around, September brought about several foreclosures. Even though things looked great just one month prior, the supply started growing and the demand was falling short. Right now you will find a healthy supply of foreclosures that haven't even been processed. So you can most likely see much of the same until next spring.

Another thing to understand is that many of these foreclosures are considered "A paper" loans. Those who have larger incomes realize what is happening, and decide to get rid of their homes and relieving a monumental piece of debt. However, two years from now they will be able to purchase the same home for much less and end up making out. You can see that this makes complete sense.

What it comes down to is there are interesting real estate investment opportunities for cash homes buyers. This is why we purchase homes in the U.S. during these specific market conditions. If you can apply the "supply and demand" scenario, chances are you can make insane profits. - 23218

About the Author:

Lance Wilson an active Invesdoor Territory Managers and real estate investment expert . Need to Sell Your Home , we Buy Houses for cash fast . We pay cash for homes.