Austin Real Estate Blog

As it turns out there is hope behind all the gray clouds created by the national media!Every now and again you have to wonder why a down market is considered bad. I talked with a friend who had the opportunity to pick the brain of a successful real estate investor. My friend told me the one gem that he gleaned from his conversation with the successful investor was that you always want ot have dry powder.

I’m not the avid hunter so forgive me if I expound on this here, but that is basically reinforcing the old adage, “buy low, sell high”. But a lot of investors tap out their funds when the market is hot and they see dollar signs. The successful investor has dry powder ready to pull the trigger when the market is down so that they are flush when the market returns. And the market always returns.

So if you’re thinking about investing, now is the time.

Check out the info below.

Excerpts: Positive Signs for the Real Estate Market

Buyers Waiting on the Sidelines Should Get in the Game

• Buyers wanting to hold properties for a long time could be well served
  by starting to look at purchasing the property now. Over the long
  term, home appreciation out paces savings from lower prices.
• Despite the recent declines in some markets,
  national home prices are up 80.5%
  over the first quarter of 2001.
• One reason potential buyers may want to act
  quickly: Historically, when home prices fall, they don’t fall for long.
• “If we go back to early 90’s when real estate prices were falling,
  the reverse came extremely quickly and very unexpectedly.” There is
  some indication that the down market period will be shorter than it was
  in the 1990s.
  The job market is actually still very healthy today and the unemployment
  rate is low, contrasting with the rising jobless rate in the early 1990s.
  When
  the market reverses you may well end up missing the bargain you were holding
  out for and wind up paying more than you would have if you had acted during
  the down market.

Excerpt from David Blitzer, chairman of the S&P Index Committee, “Good
Time to Look for a Second Home?” by Sheree R. Curry, TheStreet.com,
November 30, 2007.

• “A combination of lower prices, a large inventory and mortgage rates
  well below 7 percent offer buyers a terrific opportunity to find the home
  that they want AND make a good investment. Real estate should be considered
  a a long-term investment.”
• It really doesn’t matter if we’re
  at the bottom of the market cycle yet. What matters is, can you find
  what you want? If you wait till it’s a good
  market and everyone’s buying, you won’t have as much choice or you’ll wind
  up paying a lot more to get what you want since there will be others out
  there going after the same properies.

Excerpt from Jeffrey Otteau, a real estate appraiser from East Brunswick,
N.J., “Welcome
to the Buyers’ Waiting Game,” by Kathleen Lynn, The Record (N.J.), Dec.
2, 2007.

• “From the consumers’ standpoint, it’s the old adage: whatever you
  are buying, buy low and sell high. The marketplace right now is saying
  that prices are low, in some places, very low, so why would you not be buying?”
• The thing
  that keeps me awake is I believe that there is tremendous opportunity in
  the current real estate marketplace… that I would just hate to have the
  average individual miss an opportunity like this. I don’t think we’ll ever
  see the
  hot market
  we saw a few years ago, but we’ll definitely see it bounce back, maybe even
  shoot up, and people will see some appreciation on their properties.
• Agents are looking
  to entice people from as far away as New Zealand, Russian, and China into
  buying homes in the United States. Europeans have a 45 percent discount
  on U.S.
  goods due to the strength of the euro against the dollar. Big exchange
  rate premiums
  that Canadians long paid just across the border were completely reversed
  this year and the Canadian Dollar is equal or slightly more valuable than
  the US Dollar. .
• Century 21 in Orange County, Calif. had a recent referral
  from China. A Texas agent is working with two different
  clients from
  the United Kingdom who want primary residences in a hot market in Texas. “The
  strength of their home currency against the U.S. dollar is most likely making
  their decision a little easier.”

Excerpt from Tom Kunz, president and CEO, Century 21 Real Estate LLC, “Century
21 Seeks Overseas Buyers of U.S. Homes,” by Lynn Adler, Reuters,
Dec. 12, 2007.

NAR says that the housing market is improving

• Job growth and the replacement of subprime lenders to borrowers with weak
  credit with government-backed loans were cited as reasons for the improved
  outlook. “Despite over-exaggerated negative coverage on the housing
  conditions, many local markets are actually seeing price increases. Mortgage
  availability is improving.”

– Lawrence Yun, chief economist for the National Association of Realtors®, “Housing
Market is Stabilizing, Optimistic Realtors Say,” by Alan Zibel, USA Today,
Dec. 10, 2007.