This is the time of the year when everyone begins making their predictions for the year ahead, so what’s in store for real estate investing in 2013 and what is the biggest challenge facing those flipping houses for profit?
A recent report from Forbes described the ‘large’ amount of housing inventory as the single biggest challenge and threat to the housing market in the months ahead.
Obviously, a saturation of distressed properties has been one of the factors which have held the market back in the last few years, but is it really an issue now and going forward?
By all accounts housing inventory has been shrinking throughout 2012, despite pockets of foreclosure surges in some states. In some cities agents are reporting just a few weeks of available inventory, shadow inventory has been plummeting and many Realtors are crying out for more homes to sell.
Some may question how the current surge in new construction will affect the market, but a look at the figures shows that the rate at which new homes are going up now is still less than half of what it was during the peak of the last boom and less than what experts say are needed to be added annually to meet demand in a normal market.
Of course there are still hundreds of billions of dollars in delinquent loans out there and foreclosures will continue to trickle onto the market, offering appetizing real estate investing deals for several years. Yet, if a fear of too much inventory is the worst that real estate investors have to worry about in 2013, it is going to be an incredibly profitable year of flipping houses.
In fact, those flipping houses should be capitalizing on all the distressed properties that they can right now and be preparing to meet the huge demand for homes we will see unfold in the next few months.