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Why Now Is The Time To Invest In Real Estate

Everyone is down on real estates. Construction companies, analysts, and home sellers are all pessimistic about the outlook for the housing sector. They have good reason to be negative based on all of the information that keeps coming in. Many homeowners are still upside down, prices are dropping, and foreclosures are so. How can you invest based on these trends? It’s time to be a contrarian and start buying real estate. That’s right! This is the best time to get long real estate.

Here are 3 reasons why now is the time to start investing in real estate.

1. Real estate prices are still dropping.

The 2nd quarter real estate report was not pretty. New home sales fell off a cliff. Credit is tight and buyers are few and far between. Foreclosures are increasing and analysts are pessimistic on the whole sector. All of these signs are pointing to a market bottom. The time to buy is when investor sentiment is sour and things look their bleakest. That is what is taking place in the real estate market. Get in ahead of the curve and start looking for buying opportunities.

2. Mortgage rates are at their lowest level in nearly 40 years.

The 30 year mortgage rate is down to 4.44%. This is the lowest rate since 1971. 15 year rates are down to 3.92%. These are rates never thought possible just a decade ago. Qualified buyers can get great financing right now. These low rates are the only thing encouraging some buyers to step into the real estate market. Five years from now we will potentially look back on these times as the best opportunity to invest in real estate in our lifetimes.

3. Construction companies are not building new homes.

It’s simple supply vs. demand. There is currently a huge glut of houses that have not been sold. This will not be the case in a few years. Many construction firms have halted new projects. This assures that there will not be enough housing inventory when demand does eventually return to the market. Once buyers and renters return to the market place in droves, it will become a sellers market again.

About Mark Riddix

Mark Riddix is the founder and president of New Horizons Financial Management, an independent investment advisory firm that provides personalized investing and asset management consulting. Mark is a regular contributor to Seeking Alpha and has written financial columns for Baltimore and Washington, D.C. area newspapers. Mark publishes his own financial blog, and has written the book Your Financial Playbook.

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