Real Interest Returning to Real Estate (Trend Shift is Here)

According to Housing Predictor the top 25 major metro areas will see near double digit declines across the board.   New York leads the way with a near 33% projected decline in housing prices for 2009.   As a real estate investor (or potential investor), you can interpret this data in a number of ways.  Many are steadfast on the sidelines trying to time the market.  Others are taking advantage of the low interest rate environment.  Both have advantages, but 1 is more certain.   Financing an investment home in on a 30-loan right now with near record low rates is prudent.   Most media forms are clawing for bright spots in an ugly market, but the fact is the market still is ugly.

Per the graph above you can see according to Google search volume is up for “real estate”.  This trend shows bottoming out of search volume in the 4th quarter of 2008, with an uptick in Q1 2009, and even more life in Q2 2009.  Going a step further and looking at the bottom of the graph, you’ll see the amount of news related to “real estate” is trending down.  It’s obvioulsy no longer a hot topic.  While the news instances are in decline search is trending up.   The interpretation is that natural interst (real interest) is back for real estate.

As an investor one should consider the sustainability of the low home prices while thinking the same for interest rates.   Also when the rates rise and inflation returns leveraged investments like real estate will look highly attractive.   Don’t spend too much time trying to time the market.  Take advantage of the attractive rate environment, buy an investment home and know that you bought near the bottom.

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