Following two days scheduled housing reports that show the lowest home sales for both new and existing homes, the stock market and Wall St’s marketing engine is trumpeting the bad news. The unstated assumption is that ‘lemming investors” are left with few alternatives for their nest eggs but stocks, bonds and funds.
If you read the news or watch the tube, its time to crawl back under the covers! Hardly!
The news could not be better for wise real estate investors. Even “house values wet blanket” Dr. Bob Shiller is warning against over-reaction to this data.
Dr. Bob to the rescue?
Shiller (of the astutely marketed S&P Fiserv Case/Shiller MacroMarkets index fame) is telling people not to read too much into the data
“Let’s not overreact to these latest sales numbers,” Shiller, co-founder of the S&P/Case-Shiller Home Price Index, told Bloomberg. “July is an anomalous month.”
But last month’s survey of forecasters by his MacroMarkets firm showed they expect prices to be flat for the rest of the year. “They could (even) be going up a couple percent a year,” Shiller said.
“Dire forecasts, while they’re possible and I’m sometimes in that camp, aren’t the consensus.”
Now is OUR time!
Read between the lines. Every real estate story has a silver lining. This is the whipsaw reaction to the end of an attempt at market stimulation through tax incentives. They have stopped and the market abruptly reverts to normal behavior, not a crash.
Competition from first or move up home buyers with tax credits has gone away, many who opened escrows could not close and transactional vendors and builders are getting jittery just reading these headlines.
Warren Buffett’s over quoted “greed versus fear, versus fear versus greed” investing motivation applies now as fair weather investors are on the sidelines.
Most real investors have not seen markets like this in their lifetimes and will probably not see these again based on standard population and demand trends.
Rental investors, who buy on fundamentals, should be comfortable knowing value of that investment will improve, after it has paid for itself, generated positive cash flow, tax deductions and provided a hedge against inflation. If domestic investors do not believe this, there are plenty of foreign buyers that do.
Learn more about these foreign and our domestic market opportunities at Personal Real Estate Investor Magazine’s Investor Provider Leadership Summit – September 17th at The Royal Palms. We will introduce and help vendors and clients sell more in foreign and domestic (& SDIRA) markets. Email Andrew.waite@nexzuspub.com for more information.
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