March 14th, 2012 8:42 AM by Christopher Terry
Investors continue to find real estate an attractive investment in spite of all the "doom and gloom" in the market. A report from Zillow looking at the rental market shows an average rent increase in 2011 of 3%, while home prices fell an average of 4.6%. See article here. And when someone like Warren Buffett says to biuy homes people start to listen! If you haven't seen my video BLOG post "Warren Buffett says buy homes now!" Check it out.
So if the market is so bad why are so many investors so interested? In 2012 cash buyers made up more than 30% of all transactions. Let's look at some trends and a little history. Maybe these investors are on to something.
The above chart essentially shows two housing bottoms. The red line represents a bottom in residential investment, the blue a bottom in home prices. We know that a bottom in prices comes sometime after a bottom in investment. The chart shows that a flatening out or a possible bottom for residential investment has occurred. If history repeats itself we should see home prices level off before starting a slow recovery. This is the time frame where investment in residential real estate is high.
We have just experienced the greatest decline in national home values in history and guess what? We are still here! Homeownership is still the single greatest wealth builder for the average family and investors know it. They know that as people start to feel better about their situation in life more and more will look toward homeownership. And increased demand will fuel home appreciation.
If you follow our BLOG you might have seen this graph before but it is worth repeating. 70% of our economy is the consumer. And consumers make decisions based on how they feel. And Hope is the first step to recovery.
So, with cash buyers making up more than 30% of all transactions how can you compete? The best advice is to find a real estate professional to guide you through the process. If you are in the Greater Fall River/Bristol County Ma area check out our FREE Home Buyer Consultation service at http://www.ezhomesearch.net/save. We'll help you get on track to making the best purchase decision possible.
Chris Terry is broker/owner of EZ Home Search Real Estate in Fall River MA. He can be reached at 508-646-4777 X105 or at firstname.lastname@example.org and on the web at www.christerry.com.