You’ve heard the phrase, “Buy low, sell high” (as in how to make money in the stock and metals markets). The same concept holds true in real estate. You always want to try and buy a home for the lowest amount you can and try someday to sell it for the highest price possible. Guess what? Home values are low, so why aren’t you buying?
“If you don’t own a home buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.” John Paulson, Sept. 28, 2010 .
This guy bet against the sub-prime loan market in 2007 on behalf of his clients and made them billions. Now he’s predicting double digit inflation and gold prices up to $4000 an ounce by 2012. He’s telling everyone to buy buy buy real estate, too.
On the other side of the real estate coin, if you’re selling right now you’re most likely watching your equity erode right before your eyes. Prices have come down in Utah from the peak highs of real estate values in 2007 to between 25-40% less right now. But if you’re planning to buy after the sale of your home then you get to take advantage of how much lower prices are right now…and the phenomenal mortgage interest rates. Those rates won’t be around if double digit inflation comes to town and goal soars at $4000 an ounce. My new adage is, “It’s gonna hurt selling in this buyers market but you’re going to make up for your loss on your next purchase because you get to be the buyer. You lose, then you win and it should balance out in the end as your future investment.”
We are being bombarded with data and news these days about real estate every hour on the hour. Here’s a reality check from just two months ago: there were @1800 properties for sale in Park City at the end of the summer, 165 had offers pending, and 350 new properties had been listed in under 30 days. That’s an increase of almost 20% of inventory in one month. And what is this inventory? Many, many foreclosures and people forced on the market who are facing foreclosure (short sales).
The odds are right now if you’re thinking of selling, make sure you enter the market with a very aggressive asking price because within weeks there will mostly likely be for sale signs popping up all around you of homes with lower asking prices. Utah is thick in the foreclosure mess and we’re not slowing down in the numbers of people losing their homes. The more foreclosures on the market the less you will be able to get for your own home and that shiny gold luster of your bungalow is going to be permanently tarnished by this market.