Just because nobody wants to touch the housing market doesn’t mean it isn’t worth looking at. Because there really is plenty to look at. Contrary to all of the rumors of double and triple-dips in real estate prices, there are actually numerous signs to indicate that the dipping – at least the significant kind – just might be over. And, in fact, signs of a rebound are popping up all over. We covered these earlier, but we’re not the only ones to notice…Christopher Matthews at Time Business reasoned on May 15, 2012:
“The best reason to shed your hard-won dubiousness is a report issued today by The Demand Institute, a think tank jointly operated by the well-respected and non-partisan research organizations The Conference Board and Nielsen. The fifty-page study is definitely labeling 2012 the year of the housing bottom.”
Matthews goes on to explain the details of the report, which argue that rental prices – of all things – will fuel the recovery. With current economic trends being what they are, buying up properties to rent out is a very profitable option that real estate investors are beginning to recognize and act on.
And there’s even more information out there indicating that housing might once again be where it’s at…
A Very Solid Foundation for a Very Real Recovery
House prices are cheap right now. At an average 30-plus percent below their peak, buying a home is a bargain in just about any area of the country. In fact, in many cities, it’s even more affordable to buy – taxes and all included – than to rent. Better yet, borrowing costs have been recorded down around 20% year on year and mortgage rates hit an all-time low in February.
There are so many added incentives for people to take up their piece of the American Dream – complete with white picket fence should they so choose – these days that it’s practically a tragic shame not to act on the chance.
That’s from a buyer’s perspective. But as the previous points show, there’s an even stronger case to be made from an investor’s standpoint.
Earlier this year, The Wall Street Journal’s Greg Zuckerman wrote: “Over the last couple months some of the best investors on the street… have been making big bets on homebuilders.” Those “best investors” include extremely familiar names such as Blackstone, a top-notch global investment and advisory firm first founded in 1985.
Then there’s also:
SAC Capital Advisors, which is a $14 billion dollar corporation comprised of multiple exclusive hedge funds, among other things
Caxton Associates LP, a trading and investment firm that manages “client and proprietary capital through global macro hedge fund strategies,” as it touts on its website
Cerberus Capital Management, which, despite only starting out in 1992, quickly became a leading private investment firm… on a global scale
Canyon Partners, a corporation made up of four separate divisions – Canyon Capital Advisors, Canyon Capital Realty Advisors and ICE Canyon – is an investment management firm running some $19 billion in assets for its clients
CQS U.K., the United Kingdom division of CQS Global, which offers design management, cost management, project management and procurement advice among other construction-related services
None of those businesses got to their coveted positions of leadership in their various sectors by making foolish bets or chasing wild geese. So it’s telling that so many of them would be laying down the big bucks on such a hated market as housing.
More recently joining their ranks is Goldman Sachs, which made out like a bandit when the real estate market first collapsed. While most other businesses and individuals were falling and failing miserably in the crash, the big bank somehow managed to ride it to the top. And it’s once again placing its bets, this time by raising money for its U.S. Housing Recovery Fund.
Clearly, the smart money is moving into the housing sector. But there is still time to get in and take advantage of the bargains available. Negative sentiment still dominates the industry.
News outlets – from newspapers to radio programs to TV shows – are still painting real estate as being entirely hopeless. Skeptics say there is an oversupply… that more foreclosures are just months away from flooding the market… That housing can’t rise until the supply overhang is removed.
We believe the facts show just the opposite. They show now is a fantastic time to buy a home. Prices are cheap. And with record-low mortgage rates, housing is now more affordable than ever.
Joseph Goodman *ABR*GRI*SRES*
The Goodman Group
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