The Housing Market is Rebounding. So What’s That Mean for You?

It appears that we may be coming out of the years-long purgatory of the Great Housing Crash Cluster-Cuss of 2007. According to the Associated Press:

Sales of previously occupied homes rose 2.3 percent in July from June to a seasonally adjusted annual rate of 4.47 million, the National Association of Realtors said Wednesday. Over the past 12 months, sales have jumped more than 10 percent.

New-home sales have been strengthening, too. Toll Brothers, a builder of high-end homes, said Wednesday that it’s enjoying its most sustained demand in more than five years.

The “evidence that the housing market is recovering … is fairly clear across a wide range of reports,” said John Ryding, an economist at RDQ Economics, a forecasting firm. Housing “is now becoming a small positive for the economic outlook.”

So what does this mean for an educated, upwardly mobile single black woman? It might be time to start looking for those investment properties before they go through the roof again. Coupled with a low-interest rates, there’s time to get a deal. We’ve hit the bottom and we’re on the way up, so don’t let this opportunity pass for the next wave of growth in the real estate market. It’s the most cyclical investment I’ve seen, but it continues to be one of the soundest ways to build wealth and a residual income.

To readers who live in areas still cleaning up the goop from the last bubble busting, do take caution. Mike Killam, a realtor in Riverside County, California, says he’s seeing multiple offers and investors are coming in with 100% cash, but he’s got slight reservations. “The banks still have a stranglehold on inventory. Defaults are high and unemployment is high,” he says. Mike suspects that banks may be practicing inventory control to keep the market stabilized.

But Dan Stephenson, Chairman of the Rancon Group, a prominent real estate development company in Riverside County, and the managing partner of Europa Village, isn’t buying it. Banks are creating programs to keep people in their homes. “Now is the absolute perfect time to buy. Interest rates are unbelievably low, and banks have lots of money and they’re starting to use it again, and inventory is very low with lots of buyers out there for reasonably priced homes.”

If you’re squeamish about taking a big leap to buying a single family home or apartment building, your best bet would be to start with a condo. That way you don’t have to worry about landscaping and external upkeep of the property. Condos are also quite easy to rent. Aim for at least a two or three bedroom unit.

How to Find the Right House (Tips taken from “Creating Wealth,” by Robert G. Allen.

–Look for homes priced LESS than median in your area. You can get information pretty easily online. If you’re stuck, just asked a realtor.

–Stick to your area. Keep it within 60 miles of where you live.

–Put 10% down payment–no more. If you can get away with 5%, go for it.

Anyone else have any advice to lend? Time to pool together our intellectual capital.

 

The Man Myth