Economists are suggesting that the next 12 to 18 months could be the best period since the early 1990s to buy property at depressed prices. That’s because the real estate downcycle is close to running its course in many local markets, where prices today are 10 to 25 percent below their peak levels of two and three years ago.
Serious investors understand that real estate is a cyclical business. When times are tough for some owners, the opposite is true for investors with the knowledge, negotiating skills and vision to help distressed owners get out from under burdensome mortgage payments. Real estate consultant Jack McCabe of Deerfield Beach, Florida advises opportunity investors who are now buying waterfront and Boca Raton condo units and single family houses at 30 to 40 percent discounts off last year’s pricing.
The big factor today is financing. In all the earlier down cycles of the seventies, eighties and nineties, money was extremely expensive for investors. This time around, capital is relatively cheap and available, whether from regular lenders or private equity sources. That’s an important point for anyone thinking about whether, and how quickly, to get involved.
source: sundaymorningtalk.com
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