Over a million foreclosures went through last year. Still 2011 is pegged to see the peak in foreclosures! Is this actually good or bad for real estate investing?
If you thought the majority of foreclosure activity was over, you would be dead wrong. Foreclosures are actually up 23% since 2008! Even more homes are set to go into foreclosure this year and we will also have the coming wave of REOs that have been held back because of the ‘Robosigning’ scandal. However the good news is that we have already seen the biggest drops in value. There may be a continued small slide for the next few months as inventory continues to stack up, but drops in home values aren’t expected to exceed anther 5-10%. Even if this happens the loses are expected to be quickly made up in the latter half of the year.
While many investors lost their shirts after the recent boom, much of that was due to irresponsible, careless real estate investing that was truly nothing more than a gamble. There are many smart investors who have come through with large portfolios intact. However it is clear that right now there are better real estate investing opportunities than most have seen in their lifetimes or can expect to see again. The current market holds many great deals for those flipping houses as well as those with buy and hold strategies. While there has never been a better time in recorded history for those buying new residences.
The bottom line is if you buy right, with built in equity there are incredible profits to be made from real estate investing right now. The discounts on short sales, REOs, auctions and distressed homes are so large you can still flip houses quickly and easily, while those with longer term strategies simply cannot lose and have the chance to develop portfolios with amazing wealth building capabilities.