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Lemons in the Real Estate Market Make Sweet Lemonade
by Marnie Pehrson
The media loves playing up the negative with the economy and the real estate market. Yet, where there are problems, there are always opportunities. The trick is knowing what they are and where to look for them. To this end, we interviewed four real estate experts in different areas of the United States about what they see happening in the real estate market.
Brenda Cote, a California-based wealth building expert who focuses on real estate investing for women, explains, "We are at the doorstep of the most exciting real estate market in decades! In times of trouble, we tend to overlook that the real estate market is cyclical. At this time, home prices are declining rapidly in many parts of the country, however, prices will rise yet again. While this decline is a huge blow for homeowners, it also raises a seldom-presented opportunity; one that, for some, only comes once in a lifetime. Right now, real estate is available at discounts of 20 percent, 30 percent, 40 percent or more! This opens the door to many potential buyers priced out of the market in recent years. These buyers along with real estate investors will play an integral role in stabilizing our shaky economy. They are the rock stars."
Nancy Spivey, a real estate investing coach in the Atlanta, Georgia area explains, "Today's real estate market offers massive opportunities for investors. The time to buy is when prices are low. Deals are abundant now since it is a very strong buyer's market. Use this market to your advantage and buy low. The rental market is good right now since it is harder for people to obtain funds to purchase homes. A good strategy for investing in today's market is to rent or lease option now and wait for prices to trend upward and sell later. You always make your money when you buy; and it's been years since we've seen opportunities like those that are available today to find not only deals but steals!"
We talked to Manhattan real estate agent, Kathy Gulrich about the unique situation in her market. She said, "In Manhattan, the residential real estate market is still surprisingly strong, given what has been happening in the rest of the country." According to the Federal Reserve web site: "Manhattan's co-op and condo market is reported to have remained fairly stable in early 2008, with transaction activity roughly on par with a year ago, and prices up by about 5 percent. There was a normal seasonal increase in the inventory of units on the market in January."
Kathy Gulrich continued: "The Manhattan real estate market is quite unique in that it is comprised of virtually all apartments, rather than single-family homes. Further, about 75 percent of these apartments are cooperatives ("co-ops"), which allow a maximum of 80 percent financing (Manhattan condominiums generally allow up to 90 percent financing). The fact that purchasers cannot over-finance in Manhattan has helped protect the city from some of the mortgage/foreclosure issues that have been encountered elsewhere."
In Phoenix, Arizona, realtor Edna Lake assesses the situation there. "Now is the time to get pre-qualified and start shopping for your new home. Inventory of homes is at an all time high and the interest rates are historically low so consequently, housing has become affordable again. People who have gone into the rental market will be faced with higher rents and will realize that homeownership is more affordable than their present situation."
"The news media bombards us with the fact that the Federal Reserve will be cutting the interest rates again so people think that mortgage rates will come down drastically with a new cut. We need to understand that there is no direct relationship between a Fed rate cut and the mortgage interest rate. There are many other factors that affect the mortgage interest rates."
Mrs. Lake continues, "We that are actively involved in the real estate industry can already see that people are beginning to venture out and look at what is available and affordable. We are beginning to see that the market is adjusting and will rebound strongly very soon, and if you don't get on the express train now you will look back and say, 'I wish I had.' The real estate market goes in cycles and this is one of those cycles that people should take advantage of and watch their net worth grow."
International Investing
Kathy Gulrich explained how the current real estate situation is a golden opportunity for European investors. "The strength of the Euro is also contributing to strong Manhattan real estate sales -- particularly in the condo market. As a result, I'm working with more European investors now than ever before.
"Right now there are two ways for foreign investors to earn: First, as always, they will profit on any long-term increase in value of the property they purchase.
"Also, the very favorable exchange rate gives them much more buying power -- or allows them to purchase a property at a Dollar-to-Euro 'discount' (right now, for example, a $1 million property can be purchased for less than 700,000 EUR). So these investors stand to gain on the exchange rate, as well."
In summary, remember that where there's a lemon, you can always make lemonade if you know how to use your ingenuity. Each of these real estate professionals is available to lend their expertise -- whether you're interested in real estate investing or purchasing the right home or condo:
Marnie Pehrson, a mother of 6, has been highlighting truth and talent for 15 years. Whether it's writing a novel that spotlights individuals who've made a difference in the world or helping a talented entrepreneur create a platform for his life's work, Marnie underscores truth and talent in innovative and compelling ways. She is the creator of www.IdeaMarketers.com and helps experts promote their products and services online. For more information on her various projects and books, visit http://www.pwgroup.com.
Contact the author, Marnie Pehrson
, at marnie@pwgroup.com
.
