I just had a conversation with a good friend and LATE to the party investor. He currently invests in Southern California market and is convinced that even though the Foreclosure Market has not come into play yet, and that values show no sign of leveling off that prices are at or near lows and couldn’t possible go any further. He also believes that CA will not ever see a Cash Flow situation on new property acquisitions in SFR’s even though History would prove him otherwise.
He said he was fortunate to sell a few properties at the height of the market and is in no hurry to sell them. He is however, in a hurry to buy some, with this money sitting so cautiously in CD’s earning 3.5 or 4.5% he can’t wait to pull it out and buy some property, regardless of cashflow in the near future. Is this enough for a revival, a lot of investors waiting to dump gratuitous gains back in the market? Will this and the 1/2% decline in recent interest rates bail out the coming foreclosure market?
What do you guys think
1. Wait for + cash flows, because there’s no real hurry, R/E markets ALWAYS have an equal up period as the do a down trend so we already have 1.5 years in the books and likely will have more.
2. Pick a # and start buying for fear of a quick revival and a rise to above previous values.
I choose the 1st personally, my feelings are that the market was only driven to it’s heights by creative financing that banks are going to take a long time to not only recover from but also will need to forget about.
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