Why This May Be the Ideal Time to Buy Real Estate

294cb houses1 Why This May Be the Ideal Time to Buy Real Estate

Well, it’s only taken half a decade, but the moribund real estate market is finally starting to show signs of life. If you were thinking about making a move on a piece of property, right now is possibly the best time. You can still take advantage of low prices in most places around the country, and mortgage rates are at once-in-a-lifetime record lows: 30- and 15-year fixed mortgages are around 4% and 3%, respectively. 

Although prices are still near 2003 levels, the signs of an impending resurgence are everywhere you look. The number of people signing contracts to buy houses rose by around 4% in March, according to the National Association of Realtors, and is the highest it’s been in nearly two years.

Many would-be homebuyers are surprised to find that one fixture of the bubble era is back: the bidding war. According to a recent survey of 28 housing markets conducted by the Wall Street Journal, there are fewer houses for sale in every single one of those places than there were last quarter. This relatively tight inventory in markets as varied as Sacramento, Phoenix and Washington, D.C., dictate that the law of supply and demand is going to kick in. Even in places like Long Island, N.Y., where there’s still a depressing 16-month buildup of housing supply (realtors consider six months’ worth to be a healthy number), the number of available homes is falling.

(MORE: Housing Math: Buying Is Now Cheaper Than Renting 98% of the Time)

Buyers are no longer shying away from “distressed” properties; that is, short sales and foreclosures. The foreclosure specialists at RealtyTrac.com say there are even bidding wars on foreclosures, because investors know these rock-bottom prices aren’t going to last forever.

An increase in short sales is actually a good sign: Short sales do less damage to their surrounding neighborhoods than foreclosures do, both because foreclosures drive values down further and often fall victim to neglect or vandalism. Short sales are also better for banks because they get distressed properties off their books faster and don’t have to pay as much in legal and administrative costs. In a recent blog post, RealtyTrac vice president Daren Blomquist writes, ”Banks have recently been given additional reasons to opt for short sales rather than foreclosure over the past 18 months,” and he forecasts what he describes as a “surge” in short sales this year. By some measures, it’s already begun: Short sales first eclipsed foreclosure sales in November, according to Bloomberg, and RealtyTrac data shows short sales climbed by a third from the beginning of this year as compared with the same period last year.

(MORE: Market for Investment and Vacation Homes Has Been Booming)

Part of what’s driving this movement is more buyers are snapping up properties as rental investments or as vacation homes for themselves. Vacation-home sales grew by 7% last year, as the rising cost of travel drove people to look at “getaways” closer to their primary residences. Trulia chief economist Jed Kolko tells the Wall Street Journal, “People choose second homes that are a shorter drive rather than a plane flight away.”

Purchases of investment properties soared by 65% last year, with many buyers scooping up cheap foreclosures and renting them out. Data from real estate number-crunchers CoreLogic shows that the conversion of foreclosures to rentals will be more than a $100 billion business this year and for the next few years.

People are starting to figure out the huge potential in this market: More than a quarter of all the houses sold last year were investment properties. Fortunately for such buyers, there’s also an unprecedented degree of demand for rental housing: Homeownership hit a 15-year low in the first quarter of this year, according to data from the U.S. Census Bureau, and rent rates, which climbed an average of 5% last year, are historically high compared with the cost of homeownership.

In some places, such as college towns, a buyer-investor often can make an even greater return on the purchase price of a house. In two-thirds of the places surveyed in Coldwell Banker’s College Home Listing Report, you can buy a three-bedroom house for under $200,000. SmartMoney.com points out if the kid renting the house is your offspring, you also can net significant tax savings by purchasing a home and then renting it back to them, thanks to more lenient rules about renting to a family member versus a stranger. (Gift tax laws let you give your son or daughter up to $13,000 a year toward offsetting the cost of those monthly bills, although tax experts recommend that you avoid commingling your accounts and keep a paper trail of canceled checks or rent receipts.)

A new survey from home builder PulteGroup finds that 60% of people renting today would prefer to own their own homes, the Wall Street Journal says. This is good news if you don’t plan on being a landlord forever. When mortgage lending standards loosen, there will be pent-up demand from all those renters looking for a place to call their own. The desire to own a home is particularly strong among the so-called “echo boomers,” adults under 35 years old. This demographic made up 31% of home purchases last year, the National Association of Realtors says, but that’s still a relatively small slice of the roughly 62 million echo boomers in the United States.

Of course, these young adults are also the same ones who have been clobbered by sky-high student loan debt and above-average joblessness, which is keeping some of them on the sidelines of the housing market. Economists say as they mature and attain more financial stability, more will make the transition from renters to homeowners. The desire for homeownership is there; an Urban Land Institute survey conducted in 2010 found that two thirds of 18- to 32-year olds expect to own their own homes by 2015. Even among the remaining one third, 70% say they’ll own a home at some point in the future.

For Americans who either have cash to buy or a credit score good enough to obtain a mortgage, there’s still time to get a killer deal on real estate, but that window may be closing. If your finances can support it, now appears to be a great time to buy.

3881 Havenwood Place Unit E Alexandria, VA 22309 $118,000

3881 Havenwood Place Unit E, is located in Alexandria, VA 22309. It is currently listed for $118000.00. For more information, contact us at expert@govlisted.com. 3881 Havenwood Place Unit E is a single family home and was built in 1974. It has 3 bedrooms and 2.00 baths. 3881 Havenwood Place Unit E was listed on 05/21/2012. 3881 Havenwood Place Unit E, Alexandria, VA 22309 is a HUD owned Home. For a copy of the Property Condition Report on 3881 Havenwood Place Unit E, Alexandria, VA 22309 or to speak to a Distressed Property Agent, contact us at expert@govlisted.com. HUDListed partners with HUD Registered Distressed Property Experienced agents to help Home Shoppers with the "HUD Owned" Home Buying Process. HUD Listed is not the listing broker for this HUD Owned Property. ALL PROPERTIES ARE SOLD IN "AS IS" CONDITION. SELLER MAKES NO REPRESENTATIONS OR WARRANTIES CONCERNING THE CONDITION OF THE PROPERTY AND DOES NOT GUARANTEE THAT THE PROPERTY IS FREE OF HIDDEN OR VISIBLE DEFECTS.

Listing #: MC7846391 $1,549,500

Bethesda, MD -- Enjoy the peace & harmony on 2+ acre retreat located twenty mins. This property at 7104 Saunders Court in Bethesda has a 4 bedrooms / 3 bathroom and is available for $1549500.00.

The 701 Annie Rose Ave. by Pulte Homes: Plan to be Built $669,985

Alexandria (Potomac Yard - Potomac Greens), VA -- Ready to Build New Home in Alexandria, VA from 669985 This Alexandria property is 3 bedrooms / 2.5 bathroom for $669985.00. Call (800) 665-4161 to arrange a viewing.

CS Euroreal Real Estate Fund To Be Liquidated

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Published on: May 21, 2012

FRANKFURT (Dow Jones)–Real estate fund CS EUROREAL will be liquidated over the next five years, the fund manager said Monday, after investors tried to withdraw more funds than was available.

MAIN FACTS:

-The fund management of Credit Suisse Asset Management Immobilien Kapitalanlagegesellschaft has decided to terminate its mandate to manage the open-ended real estate fund …

Four BR, 3.5 BA, $350,000 – Four BR $350,000

Clarksburg, MD -- Complete details: http://11771.view24hours.com - please watch the tour in the 'pictures' section in the full screen hd high-definition mode. This is a 4 bedrooms / 3.5 bathroom property at 11771 Skylark Rd in Clarksburg for $350000.00.

Beautiful Condo! – Two BR $414,900

Bethesda, MD -- Fabulous first level unit. Wooden floors through the main living space. This is a 2 bedrooms / 2 bathroom condo at 11750 Old Georgetown Rd in Bethesda for $414900.00.

Beautiful Condo! – Two BR $414,900

Bethesda, MD -- Fabulous first level unit. Wooden floors through the main living space. This is a 2 bedrooms / 2 bathroom condo at 11750 Old Georgetown Rd in Bethesda for $414900.00.

Four BR, 3.5 BA, $789,000 – Four BR $789,000

Rockville, MD -- View website: http://14608.view24hours.com - please watch the tour in the 'images' section in the full screen hd high-definition mode. This Rockville property is 4 bedrooms / 3.5 bathroom for $789000.00.

Four BR, 3.5 BA, $789,000 – Four BR $789,000

Rockville, MD -- Complete details: http://14608.view24hours.com - please watch the tour in the 'images' section in the full screen hd high-definition mode. This property at 14608 Pommel Dr in Rockville has a 4 bedrooms / 3.5 bathroom and is available for $789000.00.
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