Over the past few years the restrictions on typical bank loans have become very strict. Not too long ago all you have to do was walk in to a bank, ask for a loan, find a house, and if it appraised you were golden. Yee Haw! New houses for everyone. Many knew they couldn't afford it. The loan officers knew you couldn't afford it! But, what the heck, you fell within the guidelines. Well, as we now know, this has caused a huge downturn in the real estate industry as people who were living paycheck to paycheck & credit card to credit card. Soon the equity in the homes was gone, the lines of credit were withdrawn, credit cards max out, limits were reduced and so on.
Who's fault is it? Well, it depends who you ask! Some blame the banks for giving the loans to people that couldn't afford it. Some blame investors or flippers for artificially inflating the market. Some blame REALTORS or Real estate agents for selling homes for such high prices. The way I see it everyone is to blame! The government for forcing lenders to give loans, the buyers for getting in to a payment they knew they couldn't afford. The lenders for approving the loans they knew the buyers couldn't possibly repay, the investors that didn't know when to stop and the media for talking it up then forcing ”the bubble to burst".
Some choose to call it investing, flipping, or creative financing. I, well... I call it greed. We all sat back & kept saying, "it can't keep going up, sooner or later it has to stop" well, at the end of 2005 it happened, the "bubble burst"
Where does this leave us now? We are now in December 2010, unemployment national average is at 9.5% Florida is near 13%-14% unemployment. Home prices have fallen back to the levels of about the late 1990's. A record number of people are looking for a place to rent instead of buy. Foreclosures are at a all time high. Banks are struggling to keep up with the carrying costs of all the foreclosures, local governments are trying to keep up with code issues and here you are wondering... when should I jump back in and buy or invest in real estate again?
Want know a little secret? Sales are climbing people are grabbing up deals everywhere. This is December, the real estate industry typically slows way down starting just after Halloween and doesn't pick up until about February. This year it hasn't! It’s almost reminiscent of 2004-2005 at the height of the market. Nothing seems to be slowing the deal hunters down. Believe it or not, people are once again "flipping" house and making money at it.
So, when should you start looking? I say... What are you waiting for? Real estate runs in cycles just like everything else. Whether we are at rock bottom or within 10% of the bottom, I say it's close enough buy a home and hold on to it, pick up a second home as an investment, heck buy one to help out a family member and hold it until the next time you hear the media say, The real estate bubble is back or your REALTOR says it can't keep going up, sooner or later it has to stop. Then you know it's time to sell.
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