As everyone knows, the real estate market is in the tank – at least that is the overall perception. On the other hand, we all have heard that there are people who are still making money in real estate. At least they say they are.
If it is true that people are making money, here is a quiz that should be a no brainer. By the way, this quiz won’t be graded. Not by me at least. You may decide to give yourself a grade just for grins.
Lets say you live in a housing market that has been described by a national real estate forecast service as the country’s “weakest housing market.” It is projected to have the biggest decline in value in the next 12 months among all housing markets in the nation with a 12 percent median price dip for both new and existing single-family homes.
In making its determination, the forecast service looked at 260 metro areas using more than 50 variables, including housing supply, population trends, unemployment and inflation. And, speaking of unemployment, your area has just seen a full one percent spike upward.
Not downward, but upward. You also have to consider the steady slow dribble of job losses and the underemployed. That is the job market as it currently exists.
Add in the fact the supply of homes in the middle and upper tier of the market are also still fairly high. The low end of the market isn’t a consideration because those homes aren’t in the market. They are already owned or rented.
Your malls and shopping plazas and office complexes have a higher than normal vacancy rate. The small businesses once occupying these spaces have gone out of business or are barely hanging on.
The local Realtors’ association, as one would suspect, is happily optimistic and disputes every point mentioned by the forecast service. Trouble is you can’t go through a neighborhood and not see a for sale sign or one or more foreclosed homes. But, that could be optimistic for anyone who is lucky enough to buy at a very, very deep discount.
Key feeder markets for your area are still realizing declines which, by the way, are expected to extend into mid 2010.
Longer-term forecasts show stabilization within 18 to 21 months. However, when these longer term forecasts are spoken of, but not published, no one can pinpoint the authoritative source behind the forecasts. Hmmm…
You now have the details and an almost complete picture. I say almost because it is impossible to present a complete picture given no one has a handle on that thing called a complete picture.
Here is the quiz. If you want to make money in this real estate market, how are you going to accomplish that want?
Pretty easy question wouldn’t you say? I’d love to hear your answer(s).