Originally posted by Randolph Ellis:
So for us newbies is it a bad time to invest due to the lack of inventory?
After 6 or 7 years of a beat-up housing market, nothing can last forever (thankfully), like such bargain deals on housing. EVERYTHING in life is cyclical. Real estate is no different. If you want to look at it from an inverse "positive" relationship on a graph from an investor's view, we had a " sharp rising decline (foreclosure) of a price boom" like we had a "sharp rising of a price increase boom." I call them both booms because they weren't normal and were hyper. Anway, both are not sustainable and have to drop off and go in the other direction from where they were at some point. I think if you ask most people in the know and see the unequivical data now, it says the worst part of this cycle is now over (short of some other external mechanism causing it to tumble again like Europe, our own Debt Crisis, etc). Real Estate is very local and dependent on the local economy and jobs. But generally speaking, the days of cheap homes the price of a VW Beatle going unsold with 6, 8 or 12 months worth of inventory is at the end of the cycle broadly speaking. Places like perhaps Detroit, Atlanta, pats of Ohio and Las Vegas (with very bad unemployment) maybe the local exception.
Personally, as land developer, I am waiting until Sept/Oct to be 100% certain to see if this newer and brighter market is sustainable. I think it is but I can wait longer to be sure. At that point I will determine whether to start buying up more land and build on what I own already for next Spring selling season.
My family owns 8 homes in your parts in the DFW Metroplex. You can still find some good deals (in part because the place is so big with sprawl) but they aren't extra cheap like a year or two ago. Austin is pricey because it has a booming job/economy as does Houston. Follow and go where the jobs, companies and people are moving to! Despite being pricey (relatively speaking), Austin IS the place now and good long term outlook. They have had a 6% population growth in the past 12 months alone more than any place in the US for good reasons
But if you want to get in at a good price, you will pay more now than you did even 6-12 months ago short of going into job-depressed areas already mentioned providing you have all cash because you will have company in your offer bidding.
