If you’d like to invest in real estate in 2010, you may be in luck. Despite the recent housing crisis that saw many areas hitting bottom as recently as last year, several areas are starting to enjoy multiple-offer situations. Some are even seeing the beginnings of bidding wars. Given the hope of progress, there are several areas worth considering as residential investment properties. Discover the best places to direct your investments by reading the text below.
Signs of growth
If the real estate investment bug has you looking around for possibilities, some excellent opportunities are likely in your future.
To start off, many home prices are currently at record low levels. If it appeared those levels were going to stay down for a long time, then it wouldn’t be worth your consideration. But on the contrary, several key factors are showing signs of growth levels. This sets the stage for profitable real estate investment.
Look for cash flow deals
One of the best ways to invest in real estate, especially if you’re a first-time homebuyer, is if it costs less to own than it does to rent. Given the sizeable tax credits available for homebuyers and the low prices of most houses, this is increasingly the case across several cities.
Suitable places of stable growth
When key factors like rising employment levels and a growth in rental markets come together, a solid real estate investment market usually follows. That is, a real estate investment market for investors who want to buy and hold. Quick-fix markets and houses that will “flip” for profits are still a ways off.
One recent study determined several excellent real estate investment markets are available right now, with more to come as 2010 continues. Several of the markets with excellent cash-flow positive properties are cities in the south: Dallas, Houston, Tulsa, San Antonio, and Oklahoma City. Other great markets include Salt Lake City, Phoenix, Indianapolis, Denver, and Charlotte.
Still other areas are worth considering, simply on the strength of the area markets. This includes two Iowa cities: both Ames and Des Moines, along with Killeen, TX, New Orleans, LA, Madison, WI, Little Rock, AR, and Nashville, TN.
Consistent signs of rising home sales
Both October and November of 2009 saw a surge in home sales, though it was largely attributed to the First Time Homebuyer’s Tax Credit. Regardless, the strength of the home sales was surprising across the industry. Sales were almost 46% higher than only a year before.
Sales were also helped along by super low interest rates, down to 4.88% from 6.09% only a year before.
Though it’s expected that December’s sales numbers, once tallied, will be lower than in previous months, that kind of slackening is typical for the winter months. On top of that, several buyers pushed up their closing dates to make the November 30th deadline for the Homebuyer Tax Credit – which fortunately has since been extended.
How price declines will fix the housing market
Even if prices fall further, many analysts think the housing market will only benefit. This goes back to the issue of renting. That is, if prices fall low enough to make home ownership competitive with renting, then more new buyers will turn toward real estate. This move then creates a steady influx of new buyers.
Regardless, the steady influx will have to stay steady for a long time in order to offset the huge inventories of many metropolitan areas. But on the same note, that’s where real estate investors can find real opportunity – where the supply is high, the prices are low, and the buyers are coming.
America shifts to a new paradigm in 2010
The depressed housing market has created some permanent changes in the industry, one of which is to alter industry standards so mega-mortgages will no longer be available to those who can’t afford them.
Though this initial change has been painful for many Americans (especially those who’ve gone through foreclosure as a result of the previously lax mortgage standards), the new standards signify a positive change. The culture of real estate investment is changing. As it once again begins to grow, it will be stronger and more solid than before. And that bodes well both for the country and for real estate investors.
