Recently we had the opportunity to answer a few great questions about the current real estate investing market in 2015.
Below are a few Real Estate Investing Q & A’s for 2015.
Q: What’s the general feel of most of the HONEST Experienced home flipping real-estate experts you talk to?
A: Most experienced Flippers including myself are doing well right now. With a better economy housing prices are higher than during the crash. For a knowledgeable investor there is money to be made. Of course there are some markets that have not recovered. Three factors driving the flipping market are the lower interest rates, low inventory (creates demand), and the overall feeling that the economy is doing well.
Q: Do they also see Housing at the top of another roller coaster peak about to drop hard again?
“In real estate, the rule is you make money when you buy, not when you sell.”
A: Most investors are aware that the overall market is always in a cycle. Housing is no different. Right now we are in an up cycle. There will be another drop. I don’t believe we will see that for a few years. Things may move that direction depending on the outcome of our next presidential election. Interest rates I believe will be a major factor in the future of the housing market. As rates increase it will freeze more buyers out of the market reducing demand.
Q: Can homes that lost over 50% of their value across various parts of the US in 2008, lose even more value?
A: Yes and No. Some areas such as ours never really saw the free fall. Other areas decreased but have recovered somewhat. Other areas have remained depressed. Where prices go during the next fall, I don’t know. Demand will dictate the prices. I believe a major cutback in the military will hurt C/S if it happens.
Q: Is it conceivable these folks who were 50% underwater and recovered to only 30% underwater, suddenly be 70% underwater in a few years?
A: Good question! I wish I had a crystal ball. It could happen. However, the people that will be in jeopardy during the next fall will be the people who just bought overpriced homes (like Denver). The one positive in all this, is most people who buy, are now buying at lower interest rates. Subprime loans are not in play like they were during the last crash. They should be able to ride things out. Of course, if the job market declines there will still be a substantial number of foreclosures.
As a side note: Most serious investors can do well in any market. In real estate the rule is “you make money when you buy, not when you sell.” When you buy well below market value, drops in the housing market don’t bury you. You can still make money and ride out the storm.