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Sep

29

Short Sales – A Look into the Future

Filed Under Real Estate Short Sale | Leave a Comment

Economists and investors alike have been engaged in a hot debate regarding inflation versus deflation; on one side of the ring are heavy hitters like legendary Marc Faber, Peter Schiff and Kiyosaki (inflationists) while the deflationists cite the works of “Mish” Shedlock and Henry Dent. The question is of more than passing interest to every short sale investor; invest wrong and it could easily wipe-out a lifetime of earnings.
In order to summarize the major considerations of deflation versus inflation it is necessary to take a few steps back and objectively evaluate the scenario. First, real estate is a hard asset which tends to do well during periods of rapidly rising inflation however, unlike gold or other commodities, real estate does require maintenance in order to retain its value. On the other hand, when purchased at a solid “value”, real estate is able to use leverage and create a return on every dollar invested.

Few investors or economists would quibble with the fact that assets prices have currently experienced a dramatic downturn; real estate is down 25-50 percent from former highs; certainly enough to make many people give a serious look at deflationary concerns. Before writing short sale real estate off as a bad investment due to deflationary pressures, it is a good idea to consider how long the deflationary period is expected to endure. Here are a few things to keep in mind:

1. Dollars are not safe. Foreign investors have recently made public remarks over their growing reluctance to continue buying American dollars and are reducing the quantity and velocity of purchases. As demand for dollars continues to wane, expect a flight to safety away from fiat currency and into hard assets or other alternative investments. Weak dollars translate into higher prices for all commodities and hard assets over the long term.

2. Business is suffering. As tighter lending standards combined with rising unemployment and reduced consumer demand is putting a squeeze on small business owners as discretionary spending continues to dwindle. Experts anticipate this trend is likely to continue into the foreseeable future as manufacturer reduce capacity and inventory…eventually leading to shortages and increased prices rather than continued declines.

3. Continued Printing. Uncle Sam has printed more dollars in the past year than at any time in the history of the nation. The age old relationship between supply and demand deems the more there is of something the less valuable it is – in this case, there is a lot of fiat currency floating around with very little restraint anticipated in the near future. The situation is so dire that Marc Faber recently suggested the collapse of the American economic system within 5-10 years at the same time the BRIC nations are calling for alternative index currency.

What does this mean for the average investor or short sale buyer? Simple, expect tighter lending standards to make it more difficult for households to buy a mortgage in the future, expect rising cost of materials and increased government regulations to further increase the cost of building new homes and expect the cost of all assets/investments to rise as the value of the fiat currency plummets.

The time to buy is now – people are in a “back to basics” mentality where home, family and security take precedent over flashy cars, whirlwind vacations or luxury goods. Give consumers what they need at a price you can afford – it’s a simple method tried and tested to yield impressive results over time. Find out how easy and affordable it can be to get started with short sales in your spare time by tuning in to one of the free online webinars.

See you at the top!
Economists and investors alike have been engaged in a hot debate regarding inflation versus deflation; on one side of the ring are heavy hitters like legendary Marc Faber, Peter Schiff and Kiyosaki (inflationists) while the deflationists cite the works of “Mish” Shedlock and Henry Dent. The question is of more than passing interest to every short sale investor; invest wrong and it could easily wipe-out a lifetime of earnings.
In order to summarize the major considerations of deflation versus inflation it is necessary to take a few steps back and objectively evaluate the scenario. First, real estate is a hard asset which tends to do well during periods of rapidly rising inflation however, unlike gold or other commodities, real estate does require maintenance in order to retain its value. On the other hand, when purchased at a solid “value”, real estate is able to use leverage and create a return on every dollar invested.

Few investors or economists would quibble with the fact that assets prices have currently experienced a dramatic downturn; real estate is down 25-50 percent from former highs; certainly enough to make many people give a serious look at deflationary concerns. Before writing short sale real estate off as a bad investment due to deflationary pressures, it is a good idea to consider how long the deflationary period is expected to endure. Here are a few things to keep in mind:

1. Dollars are not safe. Foreign investors have recently made public remarks over their growing reluctance to continue buying American dollars and are reducing the quantity and velocity of purchases. As demand for dollars continues to wane, expect a flight to safety away from fiat currency and into hard assets or other alternative investments. Weak dollars translate into higher prices for all commodities and hard assets over the long term.

2. Business is suffering. As tighter lending standards combined with rising unemployment and reduced consumer demand is putting a squeeze on small business owners as discretionary spending continues to dwindle. Experts anticipate this trend is likely to continue into the foreseeable future as manufacturer reduce capacity and inventory…eventually leading to shortages and increased prices rather than continued declines.

3. Continued Printing. Uncle Sam has printed more dollars in the past year than at any time in the history of the nation. The age old relationship between supply and demand deems the more there is of something the less valuable it is – in this case, there is a lot of fiat currency floating around with very little restraint anticipated in the near future. The situation is so dire that Marc Faber recently suggested the collapse of the American economic system within 5-10 years at the same time the BRIC nations are calling for alternative index currency.

What does this mean for the average investor or short sale buyer? Simple, expect tighter lending standards to make it more difficult for households to buy a mortgage in the future, expect rising cost of materials and increased government regulations to further increase the cost of building new homes and expect the cost of all assets/investments to rise as the value of the fiat currency plummets.

The time to buy is now – people are in a “back to basics” mentality where home, family and security take precedent over flashy cars, whirlwind vacations or luxury goods. Give consumers what they need at a price you can afford – it’s a simple method tried and tested to yield impressive results over time. Find out how easy and affordable it can be to get started with short sales in your spare time by tuning in to one of the free online webinars.

See you at the top!

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Mar

3

Real Estate Information

Filed Under Investment Property | Leave a Comment

I’m a little busy today so I thought I would give you some great content to read about real estate. Enjoy!

Ruth Madoff: $62 Million In Real Estate, Bonds, Cash

Ruth Madoff: $62 Million In Real Estate, Bonds, Cash – The Huffington Post.   Read more…

Real Estate Today radio show: Better than you’d expect

The group recently announced the launch of Real Estate Today, which is somewhat of a misnomer because it’s a weekly radio show. But hey: Realtors are no strangers to calling homes with no r…   Read more…

Howard Lindzon » Deep REAL ESTATE Thoughts…OMFG!

I know little about real estate and yet we has built tremendous equity over the years moving up in home size. We were in multimillion dollar home in Paradise Valley (5000 plus stupid feet and 1…   Read more…

Realty Times – Real Estate Outlook: Housing Positioned For Growth

Real Estate News And Advice – Real Estate Outlook: Housing Positioned For Growth.   Read more…

Dubai Property & Real Estate Visa Update – Mark Wallington’s Blog …

Are you looking for information on obtaining a Dubai property visa when purchasing freehold real estate? Here we have an update on the latest government news regarding visa`s with properties.   Read more…

Federal Union: Peace is more than just a real estate deal

He is critical of the Israeli left, too, which treats peace as though it were simply a real estate deal. What about justice? What about trust? These are components of peace, too, but the opport…   Read more…

Mish’s Global Economic Trend Analysis: Commercial Real Estate …

A conclusion is not hard to reach: A massive fallout on commercial real estate is right around the corner. Mike “Mish” Shedlock http://globaleconomicanalysis.blogspot.com. Click Here To Scroll …   Read more…

CoRE # 131- Rev N You | Carnival of Real Estate

The 131st edition of the Carnival of Real Estate is posted at Rev N You. Six trophies were awarded, with big points going for educational posts about the.   Read more…

Share and Enjoy:
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  • MySpace