Browsing: appreciation


RAMONA, CA - OCTOBER 30:  A real estate for sa...The great real estate boom reached its apex in 2006—and then the bubble burst. More specifically, the single family home bubble burst. Now, for the first time in years, condos and townhomes are suddenly affordable for a lot of people in places like California, Arizona and Florida. Combine this with Obama’s tax incentives and you’re looking at a buyer’s market. While this is great for able and willing prospective homeowners, it could prove to be a trap for real estate investors.

“I’m buying homes for 50 cents on the dollar!”

The question on most investors’ minds is “has the market reached the bottom?” The definitive answer is that nobody knows. On the bulletin, Joshua Dorkin posted a link that addresses this very issue. In the article, the author argues that there will not be a quick recovery to home prices. That may or may not be a true statement (although I’d bet he’s right), but home prices are definitely selling at prices half of what they were three years ago.

And therein lies the trap

Some real estate investors like to think that they are purchasing single family residences at steep discounts—“50 cents on the dollar!” But this begs the question: to what dollar are they referring?