Tuesday, September 13, 2011


There is no easy way to inform you all of what's happening in today's real estate market. No one has a crystal ball that big, to handle all the variables. But a few things we do know. It was hard to miss the news of the downgrade from AAA to AA +, and it certainly rocked the stock market. But what about real estate? That's a very good question, because although investors could run to gold and many did with its all time high of $1,700 plus per ounce, it seems like you might be selling low and buying high. What might make more sense is real estate. Investors bought, in Orange County alone, 174 properties at trustee sales. There will be more numbers in a subsequent paragraph, but what does that number mean? Well, those are the transactions that we know for sure are all cash, because they are required to be so by the Trustees running the sale. But there are many other all cash transactions happening right now. California real estate is the cheapest it's been in a generation. But the last time it was this cheap, interest rates were 7 1/2%. What are they today? You can't quote them, because they change every 10 minutes, but there are rates in the high 3's to mid 4's as of early August. There is little happening right now that will change that anytime soon. All of this makes real estate look very attractive, because you can sell your stocks or whatever, and buy lower than it's been for years. Remember, anytime you look at a 10 year return spreadsheet on real estate, it outperforms all other investments when you add the tax benefits and leverage of your money. All that being said, prices continue to skid along the bottom with some decreases in certain segments, primarily the upper end, still continuing. The question should always be, "is right now the correct time, in light of my own circumstances to buy or sell?"


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