Real Estate Investors - Red Alert

How's the real estate marketing doing? Is the huge jump in home prices that is evident in some areas symptoms of a value bubble? Good questions, yes?

Two things to keep in mind when surveying the market:

1. All real estate is local, 2. Real estate is cyclical.

Here in Arizona some residential areas have seen as much as a 30% jump in value in the last 8 to 12 months. The word about increasing Arizona home values has spread across the country. We recently sold a home to an out of state buyer who never looked at the property. His agent is just buying homes, because the buyer is sure prices will continue to escalate.

In the case of another of our houses a buyer offered $2,000 above our asking price on the day we posted a for sale sign on the property. We were asking more than we expected to get!

At the same time we received a telephone call from a relative living in California. He was very excited because his brother-in-law was sure he would get rich by buying a couple of Arizona homes. Should her do the same, he asked?

Such events have all the earmarks of a price bubble... if only in Arizona. On the other hand...

On a recent trip to Buffalo, New York, the local newspaper ran a story explaining that home sales were up. In the same article it revealed that the median price of a home had dropped. In other words, people are hurrying to buy homes that are dropping value. There's more...

Mortgage Banker's Association data shows that adjustable-rate and interest-only mortgages accounted for nearly two-thirds of mortgage originations in the second half of last year.

Loans of that type help push up housing prices, because they carry lower initial monthly payments, enabling borrowers to purchase more expensive homes. Basic economics... if more people can buy homes there is more demand... More demand means higher prices.

The rise of interest-only loans, coupled with acceptable higher debt levels for borrowers and tightened bankruptcy laws will probably soon lead to an increase in foreclosures.

If you are buying a home with an interest only loan and the value of that home drops... it is very easy for the borrower to just walk away from the payments. After all, they've built no equity in the property.

Both the Clinton and Bush administrations have pushed a policy of low interest rates and easy mortgage loan qualifying. If every voter has a home they are happy and will vote for the party in power seems to be the limit of political thought.

The truth may be that the government is setting people up for failure and financial pain. Far to many people are buying homes they really can't afford. When interest rates rise... as they surely will... all those adjustable rate loans will act like debt-traps. Interest rates will go up while wages remain stagnate. The result? More foreclosures and financial ruin for many.

There are international forces at work that will not continue to support our government's wild spending habits by buying its low interest bonds. Interest rates must rise. sooner or later?

Bubble or normal cycle... it makes little difference. If you are an investor consider selling some of your properties to raise cash for the awesome opportunities ahead. You know, buy low - sell high.

In our opinion, there is still profit opportunity if you buy at least 30% below current market value... with owner financing.

Prepare now for the coming wave of preforeclosure opportunity. We recommend the guide to preforeclosure profits you will find here http://digbig.com/4dmff

About The Author: Mark Walters is an investor-entrepreneur helping other investors from his Web pages at http://www.Lease-Option-Sub2.com

---

Residential Property Abroad

It is increasingly common for individuals to own more than... Read More

Real Estate Investing - The Marvel Of Home Depot And Lowes

Repairing a rental home (or your own home) use to... Read More

Purchasing Land: What To Look For

It doesn't take long to realize that finding the right... Read More

Creative Real Estate Investing

With a job that paid $3.40 an hour, I saved... Read More

Afford A Dream Home In Belize

Shopping for property in Belize is not as simple an... Read More

Sell Your California Home For Top Dollar

HOW TO SELL YOUR HOME FOR TOP DOLLAR1. Make your... Read More

Should You Sell Before the Housing Bubble Pops

For the past several years housing prices have risen dramatically.... Read More

Home Inspectors - Negotiating a Lower Price

To help you negotiate a fair sale price for a... Read More

Achieving Positive Cash Flow from Your Real Estate Investments

Even if you're counting on rising property values to eventually... Read More

Maximizing Curb Appeal and First Impressions to Sell your Home

We all know that a home or property of any... Read More

The Nose Knows

If you plan on getting the most from the sale... Read More

Working With Your Real Estate Attorney

Purchasing or selling a home will probably be one of... Read More

The Irish Property Market - Expensive But Worth It?

Lying on the edge of Europe facing out to the... Read More

How to Decrease the Value of Your Own House

Owning a house is part of the American Dream. Depending... Read More

How to Research and Purchase a Good Investment Property

How much do you really know about investment property? Accurate... Read More

Buying Property in Bulgaria : How to Avoid Making A Bad Investment

Where is it possible to buy a property on your... Read More

Sell Your Home Without a Realtor and Save Thousand$$$

A typical real estate commission on a $234,000 home (national... Read More

Why Commercial Real Estate is the Hottest Retirement Asset

For small business owners, commercial real estate investment is the... Read More

Investing In Land

Changing social trends point to a huge rise in demand... Read More

Dealing With Difficult Tenants

When managing residential properties one bad tenant can often undo... Read More

Dont Sell It Yourself

Don't sell it yourself! Sometimes a "FSBO," or house "for... Read More

Why Average Sale Price Statistics are Misleading

One of the most common statistics used when gauging the... Read More

Real Estate Business

Starting real estate business is not that simple. Multiple aspects... Read More

Selling Your Property Without An Estate Agent

It is possible to save £1,000s selling your home privately... Read More

What to Look for in a Real Estate Agent

Real Estate Agents play an essential, critical role in the... Read More

How to Afford Your Dream Home

Is it your dream to one day own a holiday... Read More

Why I Love Country Living

As somone who has lived in both places, I can... Read More

Why Canadian Real Estate is Such Good Value

Real estate agents, Canadian citizens and foreign investors interested in... Read More

Why Use a Property Manager?

Most experienced property investors use property managers. Why? Because they... Read More

Business Credit Card Dirty Tricks

My system teaches people that the proper use of credit... Read More

Making a First Impression When Selling Your Home

So you've decided to take advantage of the booming real... Read More

Ten Myths Of Real Estate Investing

Is real estate investing only for the wealthy? Can you... Read More

Investing in Real Estate Vehicle for Wealth Building

Real estate is one of the best vehicles of building... Read More