Many people are looking at the current position real estate is in and all wondering the same thing. We look around and see foreclosure notices on homes, bank foreclosures being put back onto the market, low prices on homes, people bailing on their current mortgage and more. The whole real estate industry seems to be in an uproar. For some the real estate bubble that burst was detrimental to their lives, while for others, it was a gift. Whichever way you look at it, like anything else, you have those that fall and those that conquer. Where are you in this deal?
It is safe to say that too many people lost their homes. This was due to a mix of reasons. Some areas got hit harder than others. For example, real estate in Southwest Florida got slaughtered by the market. Why was it so bad in that concentrated area? It was because the houses, for a short period of time, became inflated and people were buying them like crazy. People were actually paying up to five times more than the home was worth. On average, the home buyers overpaid by $100,000. This is no small sum of money. We look back now and think, were we crazy? The thing about looking back is always said to be "hind sight is 20/20".
The big boom soon came to a big bust. Now, as we sit in this market, the homes are very low priced and investors, the ones who have not lost their shirts, are having a field day. Cash bought homes are becoming more apparent now, along with an increased rental demand. Many people who lost their homes are now looking for a place to stay. Just as the investors who usurped the homes at a steal, they now have tenants. For the investor, this is a win/win situation. On the other hand, you have those people who lost their home due to numerous of reasons including being laid off from their job, refinanced their home, city improvements, increased taxes and more. For these people, they have lost their dream and now have to start again.
Home prices will be on the rise. They will more than likely see value within the next five years. An economy takes time to recover, and within five years, we should see a stable economy once more. This is a relatively short time span when you consider what all still has to take place. The real estate market has already seen some movement and bubbling with investor coming out of the woodwork and purchasing homes. We are also seeing people who never thought they would be home owners become first time home buyers. For every fall, there is a recovery. This also creates a shift in power and a more aware society, for the mean time anyway. Eventually, as time goes on, this will be history and the people ahead of us will make a similar mistake and it will all happen once more.
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