It is amusing to me to hear the variety of opinions on the economy. It’s funny how “experts” seem to emerge onto the scene while people grope for answers that would, hopefully, reveal a ray of hope. Nonetheless, our economy will do what it will do regardless of what the pundits predict.
Around the first quarter of the year the country saw a steep decline in the retail values of the housing market. In fact, it happened to be 60%, and even though the 2nd and 3rd quarters had minor gains, it was only a slowdown of the overall process. Today, realtors are predicting that there will be a slow steady rise in home values. According to them, it’s smooth sailing from here.
So do you think these guys and gals are really in touch with reality? The first thing you have to think about is the supply and demand factor. It’s really easy to understand and it all starts with the price being predicated on availability. Around the spring of 2007, potential buyers had begun to hold back. The winter brought about over-flated prices, but tended to level off. Once the 2nd quarter came about buyers weren’t worried about all the usual cautionary considerations. Needless to say it was a sobering time for many, and now deflation seems to be the trend if you’re looking for a real estate investment.
When looking at the purchase rates, you will find that most families decide to move during school summer break. This allows for a much easier transition, and when the market knows this, prices tend to rise.
After we saw a greater demand, the banks decided to hold the flow of foreclosures that surfaced. You would think that since these were held back the market values would fall. The truth is it did happen, and lowering the supply allowed the demand for each real estate investment to rise for cash homes buyers.
Do you know what this means for the future? It means when school was in session again, September brought more foreclosures. Just a month earlier things were looking great, but when the supply grew, the prices for these homes fell dramatically. So now there are all kinds of foreclosures out there for cash homes buyers to cash in on. Plus, there are still several foreclosures that are still waiting to be processed.
Keep in mind this isn’t just the low tier homes either. You will find a plethora of “A paper” loans in the big pile, mostly due to financially sound reasons. These are individuals who have large household incomes, but couldn’t make their payments for one reason or another. However, there are several who could make their payments, but decided to get out from under the huge debt in the current market. Two years from now they can purchase the same home for much less, and be in a better financial position. In the end it just makes sense.
The foregoing scenario presents some interesting real estate investment opportunities for the cash home buyer. That’s why we buy homes all over the United States during these market conditions. While the market trend may not be as favorable for the retail buyer, cash homes buyers in most U.S. markets are making insane profits by skillfully applying the simple principle of “supply and demand.
Brian Lamas an active Invesdoor Territory Manager. We Buy Houses Cash fast . Sell Your Home fast to an Investor. Cash Offers,private.
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