I saw an article this morning indicating that in some markets, there are more foreclosures coming on the real estate market than there are new homes being constructed.
What I think is strange is that this is considered newsworthy. Logically, why would a builder even bother to focus efforts in an area where there will be significant pressure on the market due to a surge in foreclosures? I can think of only one reason: Irrationality.
What is happening in the U.S. market right now is dichotomy. We have two distinct markets:
- Most of the housing market in the U.S.A. has bottomed and many are even beginning to climb. (Alabama, Texas, Montana, Utah and Wyoming have all posted gains of 4-6%)
- There are some markets that are very ugly and will continue to be due to massive overbuilding in the late 90’s and early 2000’s. I’ll bet you can guess the markets without my telling you, but here are the top 4 biggest decliners by state: California (-10.58%), Nevada (-10.30%), Florida (-8.15%) and Arizona (-5.5%).
I consider the average loss percentages above to be staggeringly LOW considering what happened in each of those markets during the past decade.
Why California, Nevada, Florida & Arizona Real Estate Continues To Be A Winning Proposition
No, I’m not suggesting you should buy property in those markets right now. I am suggesting this:
Break down those markets into two categories:
Category #1: People who have owned their properties for more than 30 months.
Category #2: People who have owned their properties for less than 30 months.
I have a strange suspicion that people in Category #1 are not being effected by the negativity in the market like people in Category #2. In fact, I’ll bet that people in Category #1 are actually still quite positive in terms of the value of their property now compared to when the property was purchased.
Why? There was massive run-up in these markets. Several of them were appreciating at 15-30% annually, and this went on for multiple years. This means that real estate values would have to be more than cut in half for most people to actually directly feel the result. And that just hasn’t happened.
I still believe we are facing one of the greatest buying opportunities ever, and certainly since the Savings & Loan crisis of the 1980’s. The key is being responsible in picking the markets where you invest. What will you do with this opportunity?
SECURE & CONFIDENTIAL
2 Comments So Far»
Sir,
what do you think about recreation realestaes liked in Hawaii maui etc? regards DS
Hi David - I can’t honestly give you a good analysis of recreational real estate - that’s something I’ve never been involved in. If anyone else has experience with this type of thing, I welcome your comments! — Bryan Ellis
With regard to your call about long tail keywords and Preston Creek apartments; I must be doing something wrong. If I go to Google and type in prestoncreekapartmenthomesmcdonoughgeorgia.com I don’t get anything. If I type in preston creek apartment homes mcdonough georgia with a space between each word and no .com I get a list of which at least the second and third listings are yours. Why I am not getting anything the other way?
John Fish
John - the idea was to get my videos ranked, which succeeded quite well as you can see! — Bryan Ellis
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