Where is This Market Going??

These days everyone is asking me about the real estate market and what I think about its future direction. My contention has always been that economic indicators are somehow skewed whenever we have a Presidential election year. The real attitude of the country, state, city, etc. is somehow not fully evident or revealed. I say wait until next March to know what really is going on with our economy in general and real estate in particular. Heck, we may not even be around by then if we believe all the New Age predictions about the end of times! Since I am a realist, I have 100% confidence we’ll be here for a long long time. This doesn’t mean we won’t have challenges or even escalated destruction on the planet. After all, humanity is relatively young and we have a long way to go to reach our full potential. But, I believe the shift will be more in raising our consciousness and awareness than anything else. So, stop worrying and start living.

What’s clear about the state of real estate is that foreclosures are nowhere near the end. In fact, as the recession and tight money environment persist we see more defaulting in the commercial arena. It’s important to know that commercial properties have short terms and are subject to review and change at each maturity. Since values are lower now lenders require additional cash infusion to extend or refinance them. Owners of these properties are barely staying alive and now they need to come up with hundreds of thousands and sometimes millions to keep their properties.

This slow dance between the residential foreclosures and nonperforming commercial notes will continue to keep the market depressed. Clearly, this is good news for all you folks out there who think the window of opportunity is fast closing. This kind of attitude could get you in a lot of trouble. Be patient and stay informed because next March and beyond will prove my point that the party goes on for a few more years. But this is no justification for you to not take action, as prices are at or near bottom right now. Seek, find, perform proper due diligence and invest if all fits together.

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Get involved now and buy something. I have fix and flip as well as buy and hold opportunists to show you that the game goes on regardless of this notion of “no inventory”. Yes, the inventory is tight but that’s when you can find your acres of diamonds! Feel free to contact me or my assistant Craig Faczan anytime. sam@samsREclub.com and craig@samsREclub.com.

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Would you like to see some actual numbers? Here’s a partial list of foreclosures in October, which seems to be on the heavy side.

Lancaster - 344 (1 in every 179 units)
Palmdale -339 (1 in every 156 units)
Acton - 49 (1 in every 269 units)
Sylmar - 105 (1 in every 236 units)
North Hollywood - 108 (1 in every 575 units)
Sun Valley - 31 (1 in every 407 units)
Los Angeles - 1412 (1 in every 629 units)

Posted in  Blog, Real Estate, Sam's Real Estate Club