The US real estate market has been in free fall mode for so long, that many investors and homeowners have been looking for signs the bleeding is slowing down. While it's no guarantee that the market is yet ready to turn around, there is room for cautious optimism with the news that sales of existing homes unexpectedly rebounded in February. True, 2.9% isn't wonderful news; however, for an industry that has seen precious little good news, it's almost cause for dancing in the street.
According to the National Association of Realtors, this equates to a seasonally adjusted annual rate of 5.03 million housing units. In case you're not familiar with the definition of the word “units” – that's either a single-family home or a condominium.
Your reaction to these figures is probably related to the area of the country in which you live, because existing home sales continue their steep slide on the West Coast, following another 1.1% drop. Fortunately, the West Coast is the only region of the country that actually saw a decrease. Sales were up 2.1% and 2.5% in the South and Midwest, respectively. But the Northeast is the star, surging by an astonishing 11.3%.
As welcome as this news is, new home sales figures once again posted a loss for the fourth straight month to the lowest level since 1995.
I think that these figures will probably run hot and cold for awhile, but if you're investing – or thinking about it – the next year and a half or so represents a tremendous opportunity for any investor willing and able to capitalize on this unprecedented chance to buy property at rock bottom prices.
The reason for this thinking is because home prices for the moment are continuing to fall. The median price of a home is down to about $244,000 – down almost 3% in a year. Right now, about 8 million homeowners have negative equity. If prices drop another 10% as most analysts seem to think they will, that would push that figure up to 16 million.
With so many people with negative equity, people are going to continue walking away from their homes – leaving the door wide open for investors with ready access to cash to waltz in and reap the rewards.
Whether you're doing short sales or pre-foreclosures – whatever your specific market niche really doesn't matter – if you have the cash you can put these deals together. You might have the means to get some cash from your local bank, but increasingly lenders are tightening their purse strings and making it more difficult to borrow money.
If you don't have access to a pool of private money, it would be in your best interest to develop a pile of cash you can tap into at a moment's notice. When you see a hot property you can get at a great price, you have to be able to pull the trigger and move on it quickly, or you run the risk of losing it to an investor who can.
To learn more about how you can build a list of private money lenders, click here.
About the Author:Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, Pa and creator of the Private Lender PowerPoint Presentation Kit. This kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your business. To learn more about this powerful step-by-step kit and receive your FREE Real Estate Wealth Newsletter go to http://realestatewealthtoday.com/.
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