Will residential real estate experience a similarly dramatic turnaround?

Question

RTC vs. the current housing crisis.   Huge profits were made in the wake of the RTC crisis two decades ago.  Will residential real estate experience  a similarly dramatic turnaround?  :roll:

Account Closed · Answer

I'm sure the RE market will recover.  When exactly is harder to say.  Unemployment and tight credit will continue to put a drag on RE spending and appreciation.

In the long run, I can't help bu think that tough times will help teach the younger generation that is not always easy.  Perhaps some will learn that need to be cautious about spending as well.  Hope this translates in time to more fiscally conservative politicians.

Bryan Hancock · Answer

I doubt prices will skyrocket simply because of the psychology of the market.  Real estate won't be "trusted" for a long time to come.

What happens will vary drastically from city to city and even amoung the submarkets.  Real estate isn't like the stock market.

I think we will muddle through for 5 or so more years.  Until the bulk of the bad debt makes its way through the system there will be a ton of random inventory coming online via foreclosures.

Account Closed · Answer

One thing that is going to affect housing prices is that there have been virtually no housing starts for a couple of years now. That has got to tighten up supply at some point.

Bill Gulley · Answer

We didn't have such a poor employment outlook then as we do now. The spped of recovery will be directly related to the employment recovery. In a couple of years, I think we will see something that we don't normally see, rising interest rate AND home prices. Now that does not make sence I know, but interest rate can only go up and as employment rebounds and as the nay sayers get quiet, more people will regain confidence and begin considering a home purchase, IMO, so as that happens prices should stablize and begin to rise...so, at the same time, you'll have rising interest rates and home prices. It will probably be an incentive to buy now before rates go up further! Time will tell.

Mark N.A · Answer

I'm not betting on a quick recovery.  I'm not betting on making money on appreciation.  I'm just not betting.

I bought my properties for cash flow and my only 'bet' is that I can keep them rented with good tenants (which, as all LLs know, is a serious enough bet as it is).  Anything else above and beyond that is gravy to me.

J Scott · Answer

I disagree with Sean about the "hockey stick recovery," but that's simply my opinion, and I don't have any specific data to support it.
          
          I hope Sean's correct...but I'm not optimistic...
          
That said, I'm not saying the market will be down forever...it will most certainly improve at some point and some speed...

Thomas Dionne · Answer

There is more REAL money to be made now than ever before. "fake money" was abundant in housing just like in tech stocks 10 years ago. All paper profits that existed because of irrational exuberance. Homes will not reach peak prices for decades in real after inflation measurements. We have a lot of inventory and few people qualified to buy.

We are over-reacting, there are 10's of millions of people with good jobs who would pay a mortgage if given the opportunity. Until our system for determining who is qualified changes its gonna be a slow going thing.

Rich Weese · Answer

Ydina- Many of these have been posted before on threads, posts, blogs, etc

1. experience of living there
2. Reynosa (1 million) 4 miles away with TREMENDOUS buying power. Many of our factories went there.
3. Pro business climate  in all TX. unlike many states.
4. Sense of wanting to be in TX
5. Excellent colleges
6. Simon malls(factory outlets) So TX location sells more per sq ft than any of theirs nationwide. (stat from when I lived there)
7. New international hwy (#69) that will eventually go from inside MX all the way THROUGH TX to inside Canada
8. Low median price homes
9. No state income Taxes (I know about the high property taxes but TX STILL is ranked somewhere in top 5 as a friendly tax state overall.
10 WEATHER- as population grows older, they head for warmer climates. No state has more room for them than TX!

Those are the first 10. Other Texans can probably list a different 10. Some are "facts" and some are personal observations or opinions. IMO, TX is # 1 for the future and is why I invested there heavily. Some areas of Texas,  I have a personal preference for and have posted previously. Hope this answers your questions. Rich

Christopher Davis · Answer

I agree with Coach, until people have confidence in their employment future they are going to hunker down. When they do wade back in it will be with baby steps.
    just my opinion

Sean Terry · Answer

Real Estate is cyclical as we all know so yes the market will come back and there will be a fortune to be made.  The BIG questions is when.

All I can say is that this market now is awesome, the deals a plentiful and at the right price cash buyers are buying.  In 2004 & 2005 it was a lot harder to convince motivated sellers to sell at a discount.  Why should they, all they had to do was list and it would sell in days.

I think we'll have a hockey stick recovery, which is exciting.

Cheers :)

Will residential real estate experience a similarly dramatic turnaround?

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