Palm Beach House Buyer- Has The Real Estate Market Hit Bottom Yet?

Posted on | November 8, 2009 | No Comments

Palm Beach House Buyer- Has The Real Estate Market Hit Bottom Yet?

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.

Earlier this year many housing markets across the country saw a 60% decline in retail values before the summer. Then the typical occurred. The 2nd and 3rd quarters enjoyed a slight gain in some markets while in others at least a slowdown in falling prices. Now some realtors are so bold as to predict a slow steady rise in home values. Yes, they will have us believe that it will be smooth sailing in the housing market from here on in.

Let’s examine this line of thought. Better yet, we will look at the facts and see whether or not these guys are really in touch with reality. Most of us have heard of the principle of “supply and demand.” It’s really very simple. Price is predicated upon the demand for a product balanced by its availability. Back in spring 2007 potential buyers began to hold back after observing a winter where over-inflated home prices were no longer inflating. When the seasonal market opened in the 2nd quarter buyers were now reluctant to pay prices without regard for the usual cautionary considerations like before. It was a bit of a sobering time for many. Since then deflation has been the trend.

The usual time to move for most families is during summer break. The kids are out of school, and the transition becomes much easier. So when people purchase homes during this time, it’s no surprise that the prices rise, even if it’s only minimal.

When there was a greater demand, banks held up the flow of foreclosures that hit the market. Since a sizeable percentage of the foreclosures were held back, you would think the values across the board would fall. This is exactly what happened, and it was something experienced by the entire market. What it came down to is that the supply was lower, and the demand was higher 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.

What it comes down to is there are interesting real estate investment opportunities for cash homes buyers. This is why we purchase homes in the U.S. during these specific market conditions. If you can apply the “supply and demand” scenario, chances are you can make insane profits.

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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