EquityScout.com :: Real Estate Investment Blog

FRIDAY, NOVEMBER 02, 2007

Real estate is local, but you should care about national trends

Nationwide Foreclosures are up 30% in the third quarter, compared to last quarter - and up nearly 100% over this time last year, according to RealtyTrac.

At the top of the list is Nevada, with one fourclosure filing for every 61 households, up over 200% from this time last year. California is in second place, with 1 filing for every 88 homes.

Investors will keep a close eye on their local situation in making investment decisions, but there are some interesting national trends forming. Notably, 45 out of 50 states experienced year-on-year increases in foreclosures. This, along with tightening credit, increasing oil prices and declining consumer confidence have the potential to have a broad national impact. This is "the tide that lifts/lowers all boats." So even though we may view national headlines with a shrug, smart investors in Oklahoma and Virginia realize that what's going on in California and Nevada really does matter.

Tags:

Add to:

(12)

posted by: Chris Smith

Comments

jeff Brown

November 03, 2007

03:11 PM

So Chris -- if $250K dropped into your lap today, what would you do with it?

Christopher Smith

November 03, 2007

08:05 PM

Next time try asking me a hard question…

But seriously, I could easily write a long article on what I’d do if an extra $250k were to fall into my lap, especially if I were to do so in a way that made my thinking transparent. But generally speaking, the real estate market – like most markets – is cyclical by nature. “Buy low sell high” looks like a no brainer on paper, but it can be hard to pull the trigger when you’re in real time.

But my personal rule is that if you’re waiting for the bottom then you should be looking to buy, ‘cause you’re not going to catch the bottom. And if you’re waiting for “affordability” then you need to cool your heels for a while – there’s a lot of downside left in the overheated markets (see the left side of the graph, above). This is a point I think we agree on, based on what I’ve read on your blog recently.

I’m a bit less crazy about Austin than you are since California money is already pouring in, which would make me a little nervous if I was getting in at this stage of the game. But if you can find properties that operate in the black without going to big on the down payment then the fundamentals of the area are pretty good, although I’m not a UT fan.

Houston still has some juice left, which is useful for me since I’m a “buy local” guy.

So…to answer your question…I’d probably put 20% down on a couple of $400-500k inner loop multi-family property here in Houston, look for a couple of small single family residences, and put the balance in the stock market. I’m bullish on oil & gas, especially services (deepwater drill rigs are renting for $600,000 per day, all time record levels) and nukes (might be a long term play, but look for a comeback – check out USEC, NRG Energy and Dominion Resources.)

The *real* play here is probably larger multi-family, and $250k gets you a $1 million property w/ some spare change for upgrades – a hell of a lot in Houston – but I wouldn’t have the bandwidth to manage it right now with the various other things I have going on. Like the vast majority of real estate investors out there, I’m a part-timer.

RealEstateInvestment Software

August 15, 2009

01:51 AM

Again a great reminder to keep everything in perspective!

Hermes Handbags

November 14, 2009

03:47 AM

You are right12

Burberry Handbags

November 14, 2009

04:03 AM

Thanks Admin wery good

DDos Protection

November 27, 2009

09:56 PM

very good..

testking

December 11, 2009

01:17 AM

Thanks for nice post.

testking 642-062

December 11, 2009

01:18 AM

Its very beneficial information about real state.

testking 642-067

December 11, 2009

01:18 AM

Great post.

power inverter

January 18, 2010

03:27 AM

but I wouldn’t have the bandwidth to manage it right now with the various other things I have going on. Like the vast majority of real estate investors out there, I’m a part-timer.

replicawatches paypal

January 28, 2010

09:36 PM

Nice airtical, i would like to tell all of my friends about it. By the way, i would like to introduce everyone of you a very nice website, it offers cheap replica rolex paypal for men and women. Such as rolex replica,
rolex replica paypal,
replica rolex paypal,
fake watches paypal .You can find almost all the replica Rolex series there. They have Latest style and classic style. Though their price are low,don’t worry about it’s quality.Every detail of replica rolex shows its original marvelous designs and the best imitation technology. I have bought from them for so many times, and very satisfied with the their goods and service. Come on, choose one you love it.

replica watches

February 09, 2010

04:13 AM

sdfgn