Real Estate

[MAXUM]

Originally Posted by secondcurve

What do folks think about the real estate market? Is it time to trade-up? Do we have further to fall? It seems like activity has been incredibly slow this summer. Any input would be appreciated.

Something I have kept in mind as I've been looking to potentially purchase. Prices have eroded across the board, in some cases considerably more than others. This price erosion has occurred with very favorable interest rates which remain historically low. Now you have to question why that is, IMHO the reason is because the banks are now putting far more scrutiny on potential borrowers and have by doing so eliminated many buyers since they cannot qualify for a loan now. Less buyers = lower prices due to high inventory. Now take this a step further, if interest rates do rise and it's not a question of if but more like when that will reduce the buying power of those that can qualify for loans. I see this as a mechanism that has the potential to further the downward trend, or at minimum keep property from any significant increases in value.

I think that if you're looking for the long haul you're chances of getting burned are less likely than if you dabbling in the hopes of flipping something any time soon. The quality of the property is key in a market like this to lessen the risk.