Oct 25 2010

Any Silver Lining?

Published by at 7:01 am under General Information

This morning I saw some interesting comments on my realty times post  from Cliff Hockley an Oregon economist. He was referring to the silver lining in our cloud of economic woes right now.  Here are some of his positive outcomes (abridged and condensed here for space purposes).

 Real Estate offers unprecedented low interest rates for home purchases: 30 Yr Fixed as low as 4.25%, 15 Yr Fixed as low as 3.75% .  These low interest rates will fuel demand to purchase homes as the prices drop to a place where average folks can afford them.  Increased residential foreclosures mean lowered prices and more opportunities for investors to buy homes as rentals.  Increased demographic demand for rentals is coming.  Significant reductions in Apartment vacancy rates are a reflection of the upcoming increased demand.  The “silver-lining” flipside to the unemployment picture is that 85 – 90% of Americans are either employed or in school. SBA financing is available ( at competitive interest rates and with low costs) to help small business owners buy a building for their business.  Other key market place indicators Banks are slowly recovering and have the cash they need to loan and generate income, albeit conservatively.  Many banks are ending their “pretend and extend” phase and are actively taking back properties and selling them as fast as they can to get them off of their books. 

Land values will come back as the recession winds down and the population increases. If you have money, you have an excellent 6 – 12 month window to look for real estate opportunities to buy your second home or a couple of investment homes.  In my lifetime I have never seen prices this low for residential real estate.  Hockley goes on to say,  Now is the time to invest… and for the turtles among us to begin sticking our necks out.

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