The housing market has done an abrupt about face since the first quarter of 2012. Home sales rose nearly 30% in January 2013 over the same period in 2012. Not only that, but average home prices have been increasing at consistent rates over the past year. For people holding real estate this is a great sign. Your investment properties are gaining valve, as of 2013, at a rate nearly double that of inflation.
The housing market is currently looking strong for both potential investors and sellers. Anyone who bought real estate in 2011 or 2012 as an investment property should start to see profitability in the coming months. If you are wondering if the market still offers the opportunity for growth, that depends on who you ask. Many industry insiders are latching on to this recovery and predicting a strong year for housing prices. However, there are some big-name detractors who point at the market as something that is being artificially inflated by the Federal Reserve.
CNN Money published a piece on the housing recovery that seems to have stirred up quite a bit of interest. It suggests that the housing market is going to make a fast, and full recovery. This is based on comparisons with previous housing markets and their recoveries. It bases much if it’s information on valuations by online sites like Zillow and Trulia, which isn’t exactly concrete data. Still, the trends they note do gel with what is actually being seen in the market. The danger in believing this is a full-fledged recovery is that the recovery has just now passed the 10-month point. This is a very short-term gain and extrapolating growth from such a limited data set is inherently dangerous.
Peter Schiff, an outspoken anti-fiat economist, warns that the only difference between the housing bubble that burst in 2008 and the one that is currently being inflated is that instead of private banks holding the liens, now the Federal Reserve does. The question that this poses is, is the Federal Reserve too big to fail? And, what happens when the Fed decides to stop buying up mortgages and starts to sell them off? Schiff believes that this will lead to astronomical inflation and devaluation of the dollar. IF this happens, real estate will suffer an even bigger collapse than the one in 2008.
Whichever way you decide to go with your real estate purchase or sale, it’s always a good idea to get a professional legal opinion on the situation. While Morgan Chu Attorney at Law is best known as the top Intellectual Property lawyer in the country, he has extensive knowledge of the housing market as well. He is the type of lawyer you want on your side when you are determining the potential of a high-end investment property.