Are you a real estate investor or have you just begun trying to get involved in investment in real estate?
The domestic housing market 2012 is still the lowest ever for the past 30 years. Nevertheless, positive reports on the real estate market begin to grow up in the national news. Socalled real estate giants would make you think its a good time to get involved in real estate.
Did you know that real estate investors popped up everywhere the last two times as the domestic housing market crashed over the past 30 years?
What did the housing market crash before?
Yes, some of you might remember how things seemed historically bad in the early 1980s. What happened then? Infomercials and books were written about ways for you to earn lots of money simply by following simple strategies.
After that, the housing market refuted in the early 1990s. Guess what, the same thing happened again. A flood of gurus popped up with magical ways to make money in real estate.
Well, when the housing market drops houses deteriorates in value. This depreciation lowers the value of housing. The longer the case, the cheaper the properties are. The housing market often reflects what is happening to the national economy.
Therefore, if houses are getting cheaper, it seems like a good time to get involved in real estate, right?
Look at what happened to the Las Vegas housing market. Back in the beginning of 2000, Nevadas real estate value hit the roof. If you owned a property between 2000 and 2005, you made a lot of money quickly. Suddenly the domestic housing markets thought and guessed what happened in Las Vegas?
Yup, Vegas also thinks and thinks really badly. Sudden properties were underwater and real estate became cheap. Private investors who could not afford to invest in Las Vegas when it was in their feast, now afforded several features. A lot of investors rushed in hopes to see Las Vegas rebound and make all the wealthy.
Has it happened
No, unfortunately, the Las Vegas market and the national drug dipped a little more. Many investors including real estate giants lost a lot of money. Did investors learn their lesson?
What do you think? No, now it was cheaper than ever before. Newer investors began playing at Las Vegas again and buying up all these great deals. Did these investors make it big?
boom The housing market became harder and these newer investors lost their money.
What can we learn from all this?
Just because a lot of real estate giants say its a good time to invest does not always make sense in all markets. Those who invested in the Las Vegas market learned this in the difficult way. Does this mean that all gurus are a lot of bluff artists not to be trusted?
Of course not, there are many reputable gurus who can be good mentors. The point is that you need to understand that not all real estate markets reflect the national average. Let me repeat
Not all real estate markets reflect the national average.
Does your statement get your attention?
You see, the news media gets its statistics from national analytical and financial tools. This is not a correct way to navigate your investments. What happens nationwide does not always reflect what is happening in your individual housing market. This fact also suggests that not all real estate investment strategies work in each individual market.
Each county and zip code have their own personality. Not a market is exactly the same. If the investors who entered Las Vegas understood this then they would not have tried to buy and hold real estate while the Las Vegas market crashed well below the national average.
Not all markets followed the national average. Lets take Rochester, NY or San Antonio, TX for example. These markets were stable during the current national crisis. Some of the real estate values in these areas have even experienced an increase in value.
The author of this article has investment properties in Rochester, NY. He started buying properties back in 1997. One family property was purchased for 45,000, in a desirable part of the city, back in 97. In 2011, the city assessed the house for more than 79,000 in a neighborhood where singlefamily houses currently sell between 92,000 102,000 dollars. In other words, this house will sell for more than the estimated value now. In 2012, the house was rated for over 88,000. It is close to an increase of 10,000 in just one year at a time when the national housing crisis was very low. Pittsburgh, PA Dallas, TX Raleigh, NC to name a few has also been affected very little by the national housing crisis.
This previous paragraph simply illustrates the fact that not all markets reflect the national average. So, how do you avoid making the same mistakes as those investing in the Las Vegas market?