Real Estate Market

13 Replies

How is the market in your areas? I had a realtor tell me today that he has never seen anything like this, he said it is bad and if you aren't a skilled realtor you will not be able to sell a house fast in this market. I thought no matter what market you buy in the key is to buy low. I think if you don't get greedy with your profits and give your potential buyer a fair deal then you should be ok flipping houses. Am i wrong?

You can sell a house in ANY market IF you price it right. Many people are unable to sell because they are not willing to admit that the market is not what it was a couple of years ago. Here in Las Vegas there is over a 1 year supply of homes based on the current sales pace. That means that if you want to sell your house you have to price it low enough that someone will want to buy yours instead of a similar house down the street.

8)

Life19,

The market here in Ohio died almost a year ago. That is bad news if you want to sell your home or are trying to make a living flipping, wholesaling, etc. It is very good news if you live here and are buying rentals.

I bought two 3-bedroom SFHs a couple of days ago. The houses have been on the market for a year at $45,000 each, which was already $5,000 below the (old) market value of $50,000. The owner finally decided that she wanted to get rid of the houses NOW and she offered them at the REIA meeting for $25,000 each. I wasn't at the meeting (which almost cost me a great deal). The amazing thing is that no-one bought these properties at the meeting. There are several serious investors at our meetings, many of whom own dozens of rentals each. In the past, these deals wouldn't have lasted 5 minutes. Now, no-one bought them, even though they were offered at 50% of the normal market value and even though they will make excellent rentals.

I am seeing more and more of these situations. I think the real estate market here is about ready to go over the cliff.

Mike

You make your money when you buy, not when you sell. That's one of the most important points in REI. That means if a house is worth $100k and you're able to buy it for $80k then you've made $20k once you take possession. You made that money up front. And the reason is because when you go to sell, that house is only worth $100k, and you're competing against other properties for sale. So if you try to jack the price, it won't easily work. It generally will only sell between a small range for a particular neighborhood and type of home. Or in otherwords you'll only get what the market will bare for it. So make lots of lowball offers. If you make 100 low ball offers there's someone who's bound to want to negotiate with you and give you a deal. So make lots of offers. And you're definitely not helping yourself by giving them list price unless, it's an apartment building that you plan to hold onto for many years.

Every "old timer" (the real estate millionaires) in my town made their fortune in the last real estate down cycle in my area (late 80's). Now they actually didn't make most of their money until the market picked back up in the early 90's, but they positioned themselves in the late 80's and when the cycle pulled out they rose to the top.

Down cycles destroy most investors, but the ones that adapt and learn to take advantage of the cycle become multi-millionaires.

I agree with Ryan,

One major thing that hasn't been spoken much of is being "counter cyclical"...

Remember right after 9/11 how the stock market began to plummet? Everyone was in a selling frenzy? Well that's when the real experts in that market were buying like crazy!!! And then just a few years later it was back to where it was on 9/10.

The real estate market has it's bears and bulls too. But it's generally a very slow moving. And generally the values don't go down, or if they do it's very mild, but when they do that's the time to be buying as much as you can. You're goal in that market is to be approaching all the sellers. And making tons and tons of lowball offers. And buying whatever you can below market value. Just like what happened in 9/11.

Then you just rent it out and hold it until the market turns around. The market will eventually spike again. Everyone will be whoopin and yelpin about how things are soaring and how everyones getting rich. And fortunately for you, you bought at a discount during the time when the market was the lowest, therefore making the biggest gains.

So if you can think long term and be counter cyclical you could stand to do phenomenal.

Generally speaking, home pricing on a national basis has done more flattening then falling.

With the exception of the auto-belt, the sectors of the country that have property declination, also enjoyed the most appreciation; leading to a flatter yield curve as a national trend.

Regards,

Scott Miller

I would agree that normally real estate prices don't decrease much if any. However, there are definitely some pockets on this cycle that I think will have to see values decrease strongly for supply and demand to balance out.

I think the opportunity for investors comes not from a drop in the retail index of prices, though. I think the bigger opportunity comes from the decrease in investors saturating the market. Many of these new investors over the last couple years would pay top dollar for an investment property. It seemed like the a "good" deal would oftenly get bid up to retail value by inexperienced investors. As the market shifts, money tightens, and more and more new investors get broke, I think the opportunity opens up that much more for experienced investors.

My point being that I just don't think that the opportunity will necessarily be proportional to a retail index of prices and/or a decrease in those prices. Whether prices decrease significantly or just flatten out for awhile, I think the opportunity lies with less competition fighting for the motivated sellers. The demand for investment property decreases, which gives the remaining investors a larger supply of opportunities to buy right. And that is what I am looking forward to.

I think the opportunity for investors comes not from a drop in the retail index of prices, though. I think the bigger opportunity comes from the decrease in investors saturating the market.

Ryan,

You are absolutely right about that!

From what I keep hearing from you Texans, you are about a year behind in your real estate cycle. MARK YOUR CALENDAR. The newbies from the big real estate fad will be out of the market in a year. They're all but gone here in my little corner of the world.

Ohio Realtor,

Congratulations on having a great year. However, I think that YOU are responsible for your success, not the market here in Ohio. Even the NAR has finally admitted that both volume and prices are headed south. Individuals prosper in every market. You must be doing something right!!!

Mike

Originally posted by "Ohio Realtor":
Two closings last week, two already scheduled for May, If this is slow please let me know I am having my best sales year yet.

Good job

I have never came a crossed a Realtor that said there was a bubble. I think they would rather chop off their right hand before they talk about a decline or a bubble.

I have noticed a lot more homes on the market, but prices have been staying the same.Heck I have seen this one house that was built in 01 on the market for over a year now. started at $270,000 now it is at $225,000

That is why i think REI is such a great investment.

No matter what the market is there are ways to make money.

Right now our market in Calgary AB is super hot with increase of 25-50% per year. This market is fairly simple to make money you buy a property and it pretty much goes up and it is easy to add value and sell.

If your in a market where things are not moving quickly it makes a lot more motivated sellers and there for easier to find deals...sit on them and eventully if you buy right you make some Cash.

Good investors can find deals in any market from the way i see it.

Trouble is if you listen to the media you'll always think the real estate market sucks..

Remember when prices were going throught the roof? The bad news story is "no-one can find a house to buy" - sold losta newspapers...

Now the bad news is "prices tanking!". They haven't done so here.

Of course, newspapers have to exaggerate the real story to create the emotion to buy the headline.

Be creative and you can profit in any market - once you know the market.

Real estate is a LOCAL issue that can never be treated correctly by using national averages.