Real Estate Information

Luxury Real Estate Information


Rancho Palos Verdes, California Homes
Palos Verdes, California Homes
South Bay, California Homes
Luxury Mexican Beachfront Homes

Featured Properties


Oceanfront Estate Near Trump National

Related Information


Loan Information
Real Estate Information
Mortgage Refinance Information

Back To The Future - Big Changes Are Coming, Get Ready Now


The comments below are quoted from a recent speech by Ben Bernanke, a member of the Federal Reserve Board of Governors...

"Looking forward, I am sure that the Committee will continue to watch the oil situation carefully. However, future monetary-policy choices will not be closely linked to the behavior of oil prices per se. Rather, they will depend on what the incoming data, taken as a whole, say about prospects for inflation and the strength of the expansion. Generally, I expect those data to suggest that the removal of policy accommodation can proceed at a 'measured' pace. However, as always, the actual course of policy will depend on the evidence, including, of course, what we learn about how oil prices are affecting the economy."

In short, the Federal Reserve knows that there will be an impact. But no one knows how big and how fast. During the oil embargo of the 1970's gasoline prices doubled several times over a matter of months. The effect was dramatic and sudden. It was difficult to adjust, because things were happening so fast.

This time around, it appears that the price climb will be gradual and steady, thus allowing the Federal Reserve and the government to make adjustments as they go, by examining economic data on a monthly basis. At least that is what they are hoping for.They know that the economic climate is changing, but they are hoping that it will be slow enough to control.

This week as I contemplated my own reaction to the changing economic environment, I felt compelled to encourage you to give some serious consideration to your personal economic circumstances. If you have a large percentage of debt relative to your income, you should take steps now to eliminate as much of it as possible. Prepare yourself so that you will be protected against unexpected economic upheaval.

Being debt free, or having a very low debt to income ratio is the best way to protect yourself in an unpredictable and volatile world. As we learned on September 11, 2001things can change dramatically in only a few hours. If you put it off, you may not have enough time to get it done.

The average person needs 4 to 5 years to pay off theiroutstanding personal debt, not counting their home. In today's world, it will pay to get started now. I have made it my primary objective to pay off my personal debt overthe next year or two.

If you currently own rental properties, be sure you have cash reserves for future emergencies.

But how might all this economic stuff affect real estate investing?

The interesting thing about real estate investing is that even bad economic conditions tend to have a silver lining. There is a cause and effect relationship at work in anygiven economy, whether it is considered a "bad" or "good" economy.

In good times, such as we've had the past 8 years, retailing or flipping for cash was the hot ticket, due to high demand for housing and the ability to sell properties quickly. In recessionary times, higher interest rates and lower housing sales fuel more seller financing, and rental properties flourish. Of course there are always exceptions to the rule, but generally speaking this is the case.

As interest rates got lower, rates of return for traditional investment vehicles went lower and lower. The result? More and more money poured into real estate lending. Hard money and other types of conventional real estate financing programs expanded drastically, making millions of dollars in new funds available for real estate investors.

As housing sales reached record levels, home sellers began seeing a boom in housing prices. It has truly been a sellers market since rates fell below 7%. What happened toinvestment property? During the past 5 years of an investing bonanza in Atlanta,GA prices for investment properties have doubled and even tripled. 3 bedroom 1 bath junkers were selling in 1999 for as little as $25,000, even in liveable condition. Today, that same type house regularly sells for $65,000 (or more) before repairs.

Going Forward:

Rising rates will have a positive effect for investors, by slowing housing sales even further. As sellers get fewer solid offers property prices will get softer. Rising rates could fuel more short selling of foreclosed properties, and this trend is likely developing now.

Foreclosures may eventually get to levels not seen since the late 1980's, due to high levels of mortgage debt among homeowners, who in many cases, have mortgaged all of their equity to pay other bills.

If rates get above 7%, you can dust off your creative financing books, as seller financing will increase. Rising rates mean rising monthly payments. This will eliminate the borderline buyers from the housing market. They will start moving back into apartments and rental houses. Vacancies will decline, rental rates will increase.

If rental rates increase, cash flows will increase. Rental property will be back in style with investors who abandoned rentals and focused on selling for fast cash in a hot market.

Companies that sell investment property can expect growing demand for rental grade properties. While it is still very early in the cycle, I believe this shift is already under way.

Economic recessions are boom times for smart investors who are positioned to take advantage of the situation. I am not predicting a recession per se' but rising oil pricesand interest rates will eventually have a big effect on housing.

Be ready to take advantage when the opportunity comes. You have plenty of time to plan for it now.

Donna Robinson is a real estate investor, author and consultant in Atlanta, GA. More of her articles are available on her website at http://www.RealEstateInvestorHelp.comShe may be reached via email at drobinson@reihelp.com


MORE RESOURCES:
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news


Forbes

Why Real Estate Entrepreneurs Should Retire The Term 'House Flipper'
Forbes
Working in real estate for five years now, however, I have the learned the vast difference between reality and reality television. One big thing I've realized along the way is that the term “house flipper” is quite often a misnomer. In fact, I'd even ...



Forbes

How A New Agent Can Claim A Territory In Real Estate
Forbes
When one decides to start in real estate, their family and friends are typically ready to support them in their new venture by connecting with the new agent to help buy or sell. But, how does a new agent connect with locals in their area beyond friends ...

and more »


Forbes

The Fundamental Difference Between Single-Family And Commercial Real Estate Investing
Forbes
When it comes to real estate investing in single-family residences (SFRs) versus commercial real estate (CRE), there is a common misperception of grouping the two into the single broader category of "real estate investing." Grouping in this manner ...



Forbes

Three Ways Commercial Real Estate Lenders Are Going To Change The Way We Work
Forbes
When I first started working with large multifamily lenders, I was surprised how few of them made loans for apartments under 50 units. Since larger transaction volumes support larger fees, it makes sense that nearly all of the major real estate lenders ...



Forbes

Real Estate Agents Answer: What Should Buyers Look For In A Home?
Forbes
Suddenly, everyone seems to have an opinion on which features your new home needs to have. We thought we would take this debate to the experts to settle it once and for all. In that light, we asked real estate agents what buyers should look for in a home.



Riverfront Times (blog)

St. Louis' Real Estate Market Just Keeps Getting Tighter and Tighter
Riverfront Times (blog)
If you're seeking to buy a reasonably priced house in the St. Louis area, may we offer our condolences? The region's real estate market, which has been on a hot streak for a few years now, just posted another set of monthly numbers that speak to just ...



Hartford Courant

Real Estate Alphabet Soup
Hartford Courant
BPO (Broker's Price Opinion): The real estate broker's opinion of the expected final net sales price, determined prior to the acquisition of the property. CMA (Comparative Market Analysis): The analysis used to provide market information to the seller ...
Common Mistakes Real Estate Investors Make Early On And What ...Forbes

all 6 news articles »


seattlepi.com

Thurston County remains hot in a cooling real estate market
seattlepi.com
Thurston County remains hot in a cooling real estate market. Blame it on the affordability. By Zosha Millman, SeattlePI. Updated 11:51 am PDT, Wednesday, September 19, 2018. A bright home with laminate floors, soaring ceilings and air conditioning.



Bisnow

In The Changing World Of Commercial Real Estate, A Degree Is Becoming A Requirement
Bisnow
For Casey Flannery, an administrative job out of college at a commercial real estate firm in Memphis, Tennessee, soon sparked an interest in trying her hand at brokerage. But it was only after Flannery, 29, took that position that she realized the ...



Real estate transactions in Greater Fall River: Sept. 21
Fall River Herald News
Dartmouth. 21 11th Street, for $342,000, from John L. Rogers to Linda J. Mackler. 20 8th Green Drive #20, for $415,000, from Leonard M. Grandfield to Maria E. Martin. 2 Clarks Cove Drive, for $1,100,000, from Richard A. Shuster to Mario Gomes. 516 ...

and more »

Google News

home | site map
© 2006 TIGER MEDIA