The new year 2011 will bring many new opportunities in Real Estate Investment. The pitfalls will be equal to the opportunities.
2010 will always be considered the bottom of the real estate market since the Great Depression. Not since the 1930's have we seen the same levels of depreciation of prices or the number of defaults and foreclosures. During the last quarter of 2010, a modest turn in the level of decline of values and the number of home sales has turned.
In the South Florida market, we have experienced the highest level of closed sales in the last 4 years starting in July of this last year. While prices have dipped on average by 45-60%, depending upon location, the number of sales has jumped over 120% over last years levels. That has virtually stopped the slide in values and in some cases has led to some bidding wars among investors on the best deals. Short Sales and Foreclosure sales still outnumber the resales in the market but this number is quickly declining.
Pressure on interest rates and the weakening dollar are putting people back into the market as well to grab the best mortgage deals before they are gone. AND they WILL be gone within 18 months at the outside. It is inevitable. The fox is already in the coop. The fox is the massive dollar printing that took place in the last 20 months by the Federal reserve and there is no pulling that back in. Those dollars are in the market place and at some point, will come home to wage an inflation war on the US. Be prepared.
Real Estate and commodities, especially those pegged in US currency will be a good hedge against the devaluing of your cash position. But debt will not be your friend by any stretch if you are holding short term adjustable interest debt. You are sitting on a time bomb that you MUST get rid of or be seriously hurt. Dont ignore this warning. It will be to your peril.
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