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Are You Taking Advantage of the Current Real Estate Market Conditions?

Peter Giardini
2 min read
Are You Taking Advantage of the Current Real Estate Market Conditions?

Back in November 2009 I wrote an article titled “Home Ownership Below 50%… Is That Possible?” One of the major points of that article was a prediction from a real estate agent that home ownership would continue to decline from its high of 69.7% at the height of the housing boom to below 50%.

Provocative prediction… wasn’t it?

Well, it seems that we are heading towards that 50% ownership rate faster than one could have imagined.  Currently the home ownership rate is at 66% with further predictions that it will be at 62% by 2011.

In this recent MSNBC survey/article, it looks like over 25% of all renters (that could be as many as 25 million renters) don’t plan on ever purchasing a home.

Couple the reasons for not buying presented in the article above with a growing population, loss of rental inventory, and very little new housing construction and you can understand that…

We are in the middle of what should be buying frenzy.  

Not convinced?  How about this . . . in the middle of our continued recession and high unemployment rates, vacancy rates are heading steadily downward with predictions (thanx Rich Weese) that the vacancy rate will effectively be ZERO by 2012!  ZERO vacancies? You have to wonder if that is even possible!

When I got stated in real estate investing (2001) I used to think that the relationship between purchase prices and rents that could be charged couldn’t get any better.  In fact, from 2001 through 2005 I thought I was a genius because I could buy, renovate and rent properties that generated net cashflow per property routinely exceeding $200 per month, and the duplexes generated even higher cash flow.

Based on the opportunities in almost all markets today, I would have been tagged as the class dunce for thinking I was doing well with just $200 net cash flow.

No, in today’s market the relationship between purchase prices and rents just keeps getting better: ever cheaper purchases with declining vacancy rates and increasing monthly rents. 

Opportunities like this don’t come around very often.  In fact, a case could be made that the last opportunity like this occurred back in 1930.

What are you doing about this current opportunity?

Jumping in with both feet buying up everything that comes your way?

Sitting on the sidelines waiting for things to improve?

Wishing you had cash to move your offers to the head of the line? 

If you answered yes to the very first item, congratulations, and best of luck going forward!

If you find yourself somewhere in the middle of the last two items and you are serious about creating passive income and positioning your business to create true wealth, then you have got to find a way to overcome the obstacles and jump in.

Best of luck!

Photo: Gabriel

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.