Posts Tagged ‘correction of the real estate market’

HomeVestors Knows That A Correction Of The Real Estate Market Is A Possibility

Monday, October 27th, 2014

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Investors who have been following home builders as their gauge of the health of the real estate market should note that they have slowed down their construction over the last month. 

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years.  The company knows that home builders are pulling back from the market again, giving investors a reason to pause and consider the reasons for this move.  When home builders reduce their workload, their analysis has dictated that there is likely to be a correction of the real estate market.  Investors should be weary if this is the case and only invest in up and coming regions.

If the reduction in the amount of new construction is any indication of an impending correction of the real estate market, investors should be ready for the storm.  The reason that construction companies have reduced their projects is because they don’t believe they will be profitable.  Obviously, real estate analysts from these companies view an ominous future and realize that new construction is not needed at the time.

Investors are advised to either avoid the real estate market entirely or end up purchasing rental property in a growing area.  The nice thing about rental property is that it can be profitable in both good times and bad.  Those who have other, more aggressive real estate investments should consider adding rental property to their portfolio and become diversified.

When facing a correction of the real estate market, investors need to invest in regions with significant economic activity that aren’t likely to be affected by such a change.Pursue real estate markets that are clearly undervalued and have a growing economy in the region.  Consider locations in the Midwest before all others and especially Ohio, as the market in this State appears to be a safe bet.  In other words, look for regions that are supplying value to their residents and calling more people to move into the location.

Investors should avoid purchasing property in a region of the country where a correction of the real estate market is in order.  Most locations in California and a few markets in Texas are currently priced excessively.  These regions experienced a boom over the course of 2013 and have become priced extremely high.  Expect that the values in these regions will drop relatively soon and even those who own rental property will end up experiencing hard times, as they will likely have to reduce their rental rates.

Investors who realize that home builders have scaled back on new construction should realize that a correction of the real estate market is a possibility.