What one thing in life that is always constant: change. Kind of ironic to how we as individuals think because just as we find that sweet spot that we desire in life -we want to hold it, grasp it, and never let go of it: forever. Just as we were fine tuning our real estate businesses and investment portfolio’s for maximium returns after living a solid 5-7 year upward momentum unseen (in such proportions) for almost 22-23 years, change occured that resulted in a required shift to not only survive but re-adjust in finding the sweet-spot to THRIVE (again).
As real estate investors, we have hit that upward momentum again (since August, 2011) where the data shows the facts that cannot be disputed. What we have is stability -that’s all we need (other than our ability to preform with a product in demand) to level the playing field in order to set our business plans into action. As I mentioned in “Keep Your Eye on the Horizon” that the economic ball is rolling in our direction (even though it may not feel like it to you) and “Stability in the Housing Markets“, opportunities are out there. Now the real estate market is a different animal then it was five years ago -but in all reality it’s just about the numbers right?
Adjust your thinking and I think you’ll find a market for what you do….
Remember the last two years, 2010 & 2011, when the hot topic was “Robo-Signing” and how the backlog of vacant housing and preforeclosures were building to such a historic level that it would swamp our real estate markets and thus put further pressure on prices (and valuations)??? Huh!?! Through October 2012, the National Multiple Listing Services shows that inventory levels of existing homes for sale is down 17%. So the national supply of existing houses listed for sale is down 17%? Year over Year existing home prices are even (with the stats for the last 3-5 months showing positive movement in major metropolitian areas nationwide). While I will agree that data shows we are off (slightly) 3-5% our historic national vacant housing stock, the trends of new foreclosures, debt ratios, and employment can offset this stock-pile.
Now, remember how I’ve always espoused that when we’ve discussed forclosure rates as an average and that @60-70% of all Foreclosures Nationwide occured in @ 5-6 States. That’s Nevada, Florida, Arizonia, California, Ohio, and Michigan. Those markets have (as a generalization) taken the brunt of the pain. What are we seeing now in those States??? In addition to the double-digit shrinkage in housing stock available for sale, those markets over-all are seeing year over year 10% increases in selling prices. That my friends is just but one leading indicator that our real estate markets are firming.
Now remember, It is all about Supply & Demand with (one added component) the ability to purchase (the financing). Supply is down. Our esteemed government will assure financing is available (while the private money market sector heals). Can we agree that demand is up? Right -there are more jobs and those who’ve always had jobs or are new to the workforce (at least 70% of the population -even for the most conservative out there) are humming right along. Think they maybe ready to move on? If you don’t your missing the data (hint: just look at the housing data).
So with all that said, I cannot disagree with the fact that all real estate markets are localized and suseptible to there respective market conditions; however, as a national average -all the trends show positive momentum. Not to mention -if you want real life experience from someone that really works the streets with (as a hard money lender) real estate investors (rather than just espousing hot air based on personal opinion and public stats), I will tell you that from our from my experience locally (Charlotte, North Carolina) and my fellow real estate peers and investors in Atlanta, Ga, Austin, Tx, Maryland, and California (to mention a few), if you think the “Rehab-To-Sell-Retail” market is dead -you are missing it. Take the Blinders OFF! ok?
Not trying to be harsh -but its a fact.
As for the 2013 real estate investing arena? I believe we will see a side-ways supply of existing homes for sale, increased employment, stabalized foreclosure and vacancy rates, zero appreciation (at least on a national basis), and continuing opportunity to provide what the home buyers demand: top notich rehabs and/or new construction in solidfied neighborhoods that demonstrate a healthy market condition.
So how about the stock market??? I couldn’t resist saying that with this preceived “Fiscal Cliff” and clear uncertainty that our current administrations unproven economic policy can create the opportunity for continued success in purchasing excellant stock investments during panic. I am clearly continuing my path of buying healthy balance sheet and cashflowing stocks that reward their stockholders with a healthy dividend. I’m not worried about tax rates -heck one needs to make a living and to reinvest for the future right? Go out an make the money first -then worry about the static. Here are some of my favorites: DUK, SO, AROW, EPD, SEP, LINN, BMY, CVX, TOT, VZ, PM, SDRL, JNJ, UNP. With the right limit prices set, one can lock in 4, 6, 10% dividend rates. Remember –do not just pick some stocks but analyze them from a business standpoint.
If you cannot tell, I am rather bullish on the future of opportunities in real estate and the stock market. Is that saying that corrections won’t occur or even change that may create another realignment? Certainly not. You see I need to move forward in life. Hiding under a rock and/or complaining about a bad set of cards that i’ve been dealt -will do no good. Accessing the opportunities, considering the risks, and taking action on a plan -that’s what i do. That with the power of compounding and time is what it is all about.