GOOD NEWS: HOME PRICES ARE FINALLY RECOVERING

I was emailed this article and thought I should share it with you. It is an interesting perspective, but supports my position that the housing market has bottomed and is moving higher. You can check my other blog postings to support this position.

Basically, I am seeing tight supply and bidding wars. We still have Short Sales and Foreclosures coming for years into the future. But as long as demand can absorb this supply, the market will and has Shifted. I am not saying prices are going to bounce back to the 2005 level, but they are firming.

This is a time when lending standards and appraisal standards should be loosened! I am not saying to lend to poor quality borrowers. I am saying to lend to people that by all normal rules qualify. The rules are so messed up right now that low quality borrowers have no problem getting a loan and A Quality borrowers are having a problem. That is an issue.

Regardless, I hope you find value in this article. Check it out and let me know if you have any questions.

Just my opinion…JeffrCameron Realtor

GOOD NEWS: HOME PRICES ARE FINALLY RECOVERING
By Dr. Steve Sjuggerud
Thursday, August 4, 2011
“Miami real estate prices are currently down around 50% from the 2007 peak, and it looks like the area is finding a bottom,” the S&A Digest e-letter reported this week.

“The biggest increase comes in the high-end market… 103 houses and condos sold for $2 million or more last month, up 21.2% from May and 27.2% from a year earlier.”

Stansberry Research is bullish on Miami real estate. (Our founder, Porter Stansberry, is putting his money where his mouth is there.)

But it’s not just Miami real estate that might be ready to climb… My new True Wealth Systems service is indicating the U.S. housing market may have already bottomed.

Home prices are just starting to meet all three criteria that I look for in an investment. I look for investments that are:

1) Cheap
2) Ignored or hated
3) In the start of an uptrend

As for cheap, U.S. houses are more affordable than they’ve ever been. “Affordable” takes three factors into account – the median home price, the median household income, and current mortgage rates.

In short, with the dramatic fall in home prices AND mortgage rates, housing is cheaper than ever.

As for hated (or ignored)… after such a dramatic fall in home prices over the last four years, investors have given up. Housing is not at the top of the headlines anymore.

And people in the industry are as dejected as ever. One gauge of industry sentiment I track is the National Association of Home Builders Sentiment Index. It’s hovering near all-time lows. (This happens at market bottoms.)

As for the uptrend… we’re almost there. The chart below shows median home prices in the U.S.

Nobody is talking about it, but we’re actually seeing an uptrend in new home prices. The trend (the 12-month moving average) is still down in existing home prices. But nationwide, they were up last month versus the same month a year ago.

At this point, we can’t confirm the bottom is in and a new uptrend is underway… But we’re closer than we have been in years.

Housing is a great value. And investors are dejected. At this point, our True Wealth Systems computers are simply waiting for further confirmation of the uptrend before saying “buy.”

So I might be early in saying this. But I believe it’s true:

If you were holding off until the market bottomed before you stepped in to buy real estate, don’t hold off any more. It’s time to put your money to work.

While things could possibly get cheaper from here, they could just as easily start going up.

By buying right now, you’ll be buying at the best value in American history. By holding out to buy something just a bit cheaper, you may miss the best real estate deal you will ever get.

So if you’re on the fence, get off it. Don’t wait any longer…

Good investing,

Steve

 

I love his 3 rules!

Homes are so cheap now that for many, it is 20 to 30% cheaper to buy than rent. That won’t stay that way for long.

Ignored, no one is talking in the news about the fact we are having bidding wars again!

Hated- read the blogs, oh my god are they nasty!

Uptrend – we are having problems getting homes to appraise. They will be appreciating soon!

Jeff Cameron