Is the Housing Market at Rock Bottom? Should I Invest Now?

I know a lot of investors are asking themselves or other investors this question monthly. I am not an expert but, I am in the industry and I know what I would do if I were a new investor. I think the first thing any good investor should do is track home sales in any given area. Home sales will not keep the same pace as other homes in certain areas, but when you see all sales going up in bad and good areas then you know you’re missing the train. In my opinion we are already at rock bottom.

Prices have gone as low as they can possibly get for certain areas. Some higher end neighborhoods started off a lot higher so they have some ways to go, but your lower end neighborhoods have basically bottomed out. It is very important to know what neighborhood your evaluating, is it a low end neighborhood where prices have bottomed out; is it a middle class neighborhood where prices are almost bottomed out, but still have a little ways to go; or is it a high end neighborhood where they still have a long way to go before hitting the bottom because of the high prices they started out with. If you can define the neighborhood that you are investing in, then it will be easy to decide if you are buying at the lowest possible price.

For example, do a search on MLS or RealquestInvestor or whichever comp service you use—and take the average sold price for all 3 bedroom 2 bath houses in that area. For those who do not know how to calculate the average, add up all the homes sold prices for one month then divide by the number of homes you added together. Do this every month for the same area containing low, medium, and high priced homes and when you see all three areas average home selling price rising, then the general market is getting better. As of right now, I do not think anyone’s housing market is significantly going up, or at least not where I am located here in Georgia. Georgia is here for the picking. Prices are almost rock bottom in all neighborhoods and we continue to be a common destination for most northerners who are living in places where their property values are outrageous. In some places, the price that northerners are paying for a four bedroom they could come here and get a mini mansion for the same price.

In addition, a lot of investors who brought property right before the market crashed are letting the properties go back to the bank deliberately. Then they look for the same property as a REO listing and buy it back with cash for a quarter of the amount they previously owed on it. I’m not sure if this is legal, but people are doing it. To answer the question from above I would say yes, this is the time to buy. Wait any longer and the prices for homes may start to go up. Investors can buy some really good cash-flow properties if they work with the right people. Would you rather buy an investment property from a wholesaler and let him make $5,000? Or do you want to buy an investment property for $25,000 more then you should have. It’s a no brainer if you ask me!