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Forums » General Real Estate Investing » Have we seen the bottom of the market?

Have we seen the bottom of the market?

30 posts by 19 users

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· Indianapolis, Indiana


Do you feel that we have hit market bottom?

Since this might vary from location to location, how do you feel about the market bottom where you are either already invested, or looking to invest in?



· Indianapolis, Indiana


How is this not a HOT topic?



Real Estate Investor · Ohio


No, we're not at the bottom. In fact, I think we've still got a LONG way to go. What we have now is a slight improvement in the stock market (a bear market rally), just like we had during the great depression. In the great depression, that was followed by the bottom dropping out and that's exactly what I expect this time. Bear market rallies with the temporary increase in bear market sentiment occur in all bear markets.

This issue here is VERY simple. We got into this problem because the American government and American people have been overborrowing and overspending for DECADES. The government's solution to this problem is to borrow even more and spend even more! Sure, that HUGE amount of funny money they have pumped into the market is causing a temporary slight rise in the stock market, but don't think for a minute that's going to fix the economy. All that fake money (created out of thin air) is going to DESTROY the economy and real estate along with it.

Mike



Real Estate Investor · Baltimore, Maryland


Mike, if it's going to destroy real estate, why are you in this business?



Real Estate Investor · Ohio


The fact that real estate has farther to fall has nothing to do with the profitability of my business. In fact, the rental business hasn't been this good for at least the past 6 years. I am COMPLETELY full right now and rents are going up. Even if the prices of property go down, it doesn't affect the cash flow!

Mike



Rehabber · Santa Clarita, California


I don't think we are at the bottom but there are several areas that have shown signs of recovery and stabilization.
I think the question is to broad to answer from a National level and can only be answered from a local level in my opinion.

That being said, many local areas here in So Cal have seen sales increase, supply decrease, buyers increase, and values stabilize.

I have also seen sevral areas in Las Vegas where the prices continue to fall, however, the rental market is good and you can pick up properties for much less than the cost to build.


Small_be_logoWill Barnard, Barnard Enterprises, Inc.
E-Mail: [email protected]
Website: http://www.barnardenterprises.com
http://www.InvestorExperts.com



Recently, there was data indicating that home sales, especially in pre-owned homes, shot up 5% or something. New constructions are still down. The purchases in pre-owned homes is largely due to investors picking up foreclosures that are good deals. It is very difficult to say, objectively, what is the bottom or what does it constitute? Many investors here are looking to buy their way to the bottom, if the numbers of the property work out.

Also, I guess... I don't have any idea of what I should be looking at to predict the market, though it looks like the gobbling up of foreclosures is the movement towards the equilibrium, and inflows into the system, clearing up a lot of the bad debt. But if you're looking for a deal, I think its really been the time to look for the last few months.



Real Estate Agent · Anderson, South Carolina


I have to agree with what MikeOH said. If it cash flows, the numbers work, etc- calling the bottom has nothing to do with some individuals making money & how/when they do their deals.

No matter how you define the bottom, calling it a long time after it has happened may be the only way to safely call it. Missing opportunities waiting for the bottom may not work for some, may be necessary for others. Crunching the numbers on a property by property basis is what is required along with a long hard look at your plans, the possible problems, and several different exit strategies..



Real Estate Consultant · Wethersfield, Connecticut


I agree with Mark, you don't have to time the bottom, just make sure that the deal works today. Having said that, I would stick to stable neighborhoods with a good mix of long term owners. This hopefully insures that will not have a lot of close by vacant properties to compete with you when you have to lease yours. Steer clear of new track developments where everyone bought their house at the same time, you could end up with every other house on the market and these neighborhoods will take a longer time to stabilize.



Real Estate Investor · Eunice, Louisiana


In Louisiana, there has been no economic effect at all. Everything is still running fine. We are dependent on oil. When oil companies are doing good. Louisiana is doing good. The majority of people here work offshore on the oil rigs.



Real Estate Investor · Atlanta, Georgia


For some statistical perspective on the "Great Recession" vs. the "Great Depression" CNN did a side by side comparison:

http://money.cnn.com/news/storysupplement/economy/recession_depression/



Real Estate Investor · Ohio


Leave it to CNN to publish that bit of garbage. Did they even get one "fact" right?

Mike



Rehabber · Santa Clarita, California


While the statistical facts on the numbers may be correct, I don't think that those numbers are an accurate comparison of what our market conditions are today compared to the depression and would therefore agree with Mike's short answer.


Small_be_logoWill Barnard, Barnard Enterprises, Inc.
E-Mail: [email protected]
Website: http://www.barnardenterprises.com
http://www.InvestorExperts.com



I don't know if we have seen the actual bottom yet, but I do know the recovery will not be a V-shape. It will take YEARS for prices to recover to where they were even if we are at or near the lows.

My gut, tells me some areas still have a ways to go down before starting bouncing along the bottom for a while.



Rehabber · Santa Clarita, California


Every city has it's own DNA and some cities will have a flat line while others will continue to drop.

I agree wit Taz in his assessment and would add that anyone thinking that RE recovery equals a steep incline in pricing is sadly mistaken. The market has already proven that obscene pricing can not be sustained unless income ratios increase accordingly.

Not only that, it will be a long time, if ever, that the mortgage industry and Wall Street will get away with the raping and pilaging they accomplished in 2004-2007.


Small_be_logoWill Barnard, Barnard Enterprises, Inc.
E-Mail: [email protected]
Website: http://www.barnardenterprises.com
http://www.InvestorExperts.com


Real Estate Investor · Atlanta, Georgia


I am just looking forward to the 180 degree difference between doing business in a buyer's market that thinks property is appreciating vs. depreciating.



· New York


kudos to you mike. while i don't think we have necessarily bottomed yet you cant wait for that. prices are at levels that you can make money and that's what you must do.
lazy people wait for bottoms in a market like this.
my prediction:people that invest now in this market and hustle through the tough times a little, will be the ones that look back at what a perfect market this was.

jeff.




I am not sure that it is not going to destroy it.



Real Estate Investor · East Aurora, New York


Real estate is very much a local phenomena. In the area of western NY where I invest it never had the large upswing and it still continues to grow at 4-5% a year. We have had no drop in prices at all.

I found this graph which shows nationally how much real estate prices ran up during the past decade. It points to the potential for large drops to still occur in many areas

http://extremeperspective.blogspot.com/2008/11/how-much-will-housing-prices-fall.html



Real Estate Investor · Las Vegas, NV - LAS, Nevada


Just saw 2 theories on what it will take for a complete correction. I cant say that either was a big favorite of mine. One was to open up the borders and let in any immigrant that has enough money or credit to buy a home. Theory says that 2 years of this would bring about a total correction.

Second theory was to give vacant properties to those in govt programs like Section 8 to fix up and if they do give them the deed. I almost choked at this one.

Fact is, houses need to be affordable. No one making 40K a year needs a 400K house. Unless median income jumps, or the value of a dollar rises we will be at lower levels than the height. The value of the dollar is currently poised to be decimated by "created money". So no major move back to post bubble prices.

Personally, give me 3 more years of this and I will be exactly where I want to be.





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