ForeclosureS.com Expert Expects A Strong Housing Rebound In '09...Seriously?
ForeclosureS.com's real estate expert and president, Alexis McGee, expects a strong rebound in housing in 2009. She said the foreclosure hemorrhage has finally slowed and should see a significant decline in foreclosures in '09 as buyers return, pushing home prices up and fueling a real estate recovery.
I think that is truly wishful thinking, but below is more of what bullish Alexis McGee had to say and I'll respond at the end.
"Recovery is underway. Affordable is back in the housing market. In 2009, housing will not only recover, but we'll see buyers leap into this market in droves, depleting our housing oversupply, and actually put higher price pressures on the market."
"With 4.5% fixed mortgage rates, housing prices lower than they were 'pre-housing bubble', commodity prices lower, tax credits available for homebuyers, and the government eager to stimulate our economy, for the first time in years I can see prices rising again in 2009."
"This is a great time to buy properties for investors -- to buy properties at wholesale prices below today's already low prices -- rent them out for positive cash flow and then sell them for big profits in
late 2009 once price appreciation kicks in."
"California is a great example of what's happening now and what lies ahead for the housing sector. Long a leader in the subprime mortgage mess and rising numbers of foreclosures, the state's foreclosures have slowed significantly. What I can tell, though, is that hardest hit housing markets have already hit bottom and others will follow in 2009," says McGee.
I do not believe housing prices will rise in 2009. There is just an immense amount of unoccupied inventory on the market that will continue to hurt housing prices. What this expert seems to forget, while lower rates and home prices are helpful, the mortgage products that appealed to a majority of Americans are still unavailable. Housing prices rose as more aggressive mortgage products, such as 0 down loans were made available to people with lackluster credit. Until the government initiates these types of programs again, you can surely expect housing prices to continue to fall.
The one point I do agree with this housing expert is where she talks about investors. Investors who are looking for rentals, can definitely be cash-flow positive as soon as year one, which was unheard of before. For example, a fellow investor bought 4 houses in September for a total of $20,000, and he'll receive a total of $40,000 in annuals rents (net out taxes and he's still cash-flow positive). Those types of opportunities are available and an investor looking for extra cash-flow would be right to pursue them.
-J
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