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The Real Estate Bubble - Is It Too Late to Buy Now?
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Everyone is talking about the real estate bubble, but is it already too late to buy?
Real estate Bubbles are local in nature like all real estate. It may not be too late to buy in your local market but you need to give it some thought. Several factors increase the likelihood of a local market bubble:
1. Who is currently buying local real estate? Are they home owners or speculators who hope to "flip" their purchase for a quick profit? Speculators drive up prices but they will bail out of the market quickly. Some speculators won't be able to make the payments on several properties if they can't quickly sell.
2. What type of property is appreciating the most? In some markets condominiums appreciate faster than houses. Many new condominiums offer pre-construction pricing in some markets. This allows buyers to make a relatively small deposit and then try to find a quick buyer to close the deal before they have to put up more money.
3. In most markets single family homes are the top sellers. Speculators are active is some of these markets also. One test is to determine if home buyers in your market will actually occupy the homes they buy. If not be cautious.
4. Are investors buying multiple properties? How will they fund all the mortgages if the market slows and they can't sell? This creates a situation where they may drastically mark down prices just to escape bankruptcy.
5. What is the housing demand in your market? Is your area popular with a steady influx of new households or is new household formation flat? Housing in some areas is in high demand. The demand on the East and West coast and in the South is generally strong.
6. What is the age and income status of new buyers? Many baby boomers are jumping into the second home real estate market early. They decided not to wait, but to buy their retirement homes now and lock in low interest rate mortgages while they can.
The final decision to buy now or wait for possible softening in the market is a very hard decision and should be driven by need not greed.
 Greenspan is Puzzled?
RealEstate-Search.com offers a different look at Real Estate markets, featuring over 4,000 eBay real estate listings in 50 States and overseas.
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