This article talks about how commercial real estate is falling in value. The article gives a few reasons to be pessimistic about the economy. One of them:
“We expect construction activity to continue to pull back over the next 18 months,” as “property values still face significant further declines.”
This article talks about how the new 10% tax incentive (up to $8,000 max) makes it a good time to buy a first home.
That’s from now until Nov. 30 or Dec.1 depending on which newspaper article you believe. In the article linked above, one couple amended their 2008 return and are expecting a check in a few weeks. They say that needs to be done by April 15th so I guess now you’d have to wait till you pay your 2009 taxes.
Anyway, this article says things might be working and real estate may be ready to lead a US economic recovery. It’s possible but I’m not sold that we’re in a recovery right now.
This article talks about how vacation home sales are on the decline and how prices are coming down. But the conclusion is that retiring baby boomers will start buying vacation homes and retiring in them.
I know a few retiring baby boomers, and some bought a place near Disney that could be considered a vacation home by some but most of the ones I know prefer to stay near their friends / kids. So I’m not convinced that baby boomers will be driving the market in places like Costa Rica.
There’s also a personal finaince lesson here. One that I’ve mentioned about saving for unforseen medical expenses (because you can’t trust the insurance companies) and one that I shouldn’t have to mention about interest only mortgages:
But so far, no buyers. While she has dropped her price on the property, with its rambling five bedrooms and nearby rain forest, from $2.35 million to $1.5 million, she is experiencing firsthand just how dismal the market has become for vacation homes. She has enough money to pay her interest-only mortgage of $3,800 through July, but after that, there are no funds left.
She decided to sell the property because of unforeseen financial problems, such as medical expenses. “We’re about to lose it to the bank.”
Here is my situation. I work in Manhattan and a make a decent living. I am renting an apartment in Westchester with my girlfriend and I can’t help but want to own my own place and rent it out. I have about $25,000 available to put towards a downpayment, taxes, closing costs, etc. When my lease is up this fall I plan on moving back home to Stamford, CT to save money towards my first home purchase.
I know over the next year or 2 the market will be down and I want to capitalize on it since I have some money, I am young, and I can capitalize on the first time home owners loan (I have great credit as well). I would love to buy a place and rent, or buy a place close enough to NYC that I can commute from if I can’t find a tennant. Any suggestions on how to approach this? I know the first line of business is getting approved for a loan, but what other suggestions have you got?
Answer: How about picking an area with an upside and getting in touch with a local real Estate agent about purchasing a two family investment property where you can live and rent out either a finished basement or an upstairs pad. I think that would be a good start because this is clearly a buyers market and there should be a whole lot for you to choose from. Also making the rental your primary residence helps lower the necessary down payment.
Also keep in mind as more and more people are losing their homes to foreclosure, rental properties will be on the upside for years to come and don’t worry about those folks being bad risk just because they lost their homes as they still needed a stable roof over their heads.
Here’s a good article on NYC real estate.
The Stuy Town project certainly has potential, but given the market and the need for their fellow investors to receive immediate gains, they are really hurting right now.
Compared to the rest of the economy however, real estate prices in nyc have only gone down 3% since the last quarter. However, the two main things that pose risk now are:
1) Lack of wall street bonuses and new jobs, creating vacancies in luxury apartments
2) Lack of lending for developers
Interesting article here on investing in Malysian real estate. I like the idea that about 50 grand can buy a nice proprty 15 minutes from KL.