"Is it time to invest in real estate?"

My answer is a qualified "yes". In much of the country, real estate prices have fallen to levels not seen in years. Many markets have very good properties being offered at deeply discounted prices, with a real opportunity for price appreciation.

I was encouraged to see an increase in real estate purchases over the past few months. Most of this buying was driven by perceived "too good to be true" pricing deals. I am certain some of these purchases were good deals, while some probably were not.

It is important to know the market - there are good deals at a $1 million and bad deals at $10,000.

Of course, the price of a property is not and should not be the only reason to invest in real estate. Real estate investing, as with all investments, requires a strong understanding of the specific market, the fundamentals of the investment, the quality of the property, the property's location, and the trends and changes in the community.

Below are some reasons, beyond price, that make the present market an opportunity to buy real estate.

• Real estate markets are local.
  In some areas, real estate prices have dropped in sympathy to the general market�s mood, with little to do with the actual market in those locales. The bursting speculative bubble of some real estate markets caused prices to fall in all markets. In many markets, lenders and owners ignored the fundamentals of the local market when panic hit, causing property prices to drop. Markets are local not national. Keep an eye on the national news but focus on the local market.
• Fear is pervasive.
  Fear in any market will lead people to make bad decisions. Panic and greed, cause unrealistic swings in pricing and have an effect on all assets in the class. Panic in the general real estate market moved prices down in most markets, creating opportunities for the savvy investor to acquire properties in sound markets. During a market panic, be patient and find the right opportunity. There will be properties that are sold without regard for their true value.
• The uncertainty of the election is over.
  We now know the Democrats will lead the political agenda for the next few years.
• Democratic control.
  The Democratic leadership, with domestically focused programs, will prove to be very good for the real estate market. The government must focus on improving the country�s infrastructure, making public investments into bridges, schools, roads, and energy. This type of domestic investment will be very good for the economy (think jobs) and very good for the real estate market.
• There are many real estate rescue packages being discussed.
  It seems that every day there is a new proposal to stabilize the real estate market. Most of these rescue/stimulus proposals have some component to promote real estate investment: tax credits, lower interest rates, and the loosening of credit standards. Most real estate stimulus packages will prompt the real estate market to stabilize and appreciate.
• The bank bailout will help.
  The government is investing hundreds of billions of taxpayer dollars into the capital markets to prop up lending and unfreeze the credit markets. As the credit markets ease and lending becomes more vibrant, real estate prices will stabilize and begin to appreciate.
• Banks need (that's right, need) to make loans.
  For local and regional banks, their primary source of income comes from lending into their local markets. The financial shake-up moved many banks away from investments in stocks, hedge funds, and derivatives, and back to their core lending: real estate. The thawing of the credit system and government-encouraged bank lending into real estate will drive more property purchases and higher property values.
• Rationality will return to markets.
  In general, the overall market has become more rational in the past week. Emotion is being replaced with fundamentals. Markets are beginning to behave in a more predictable and rational manner. Stability is very good for real estate markets and will bring in more buyers.
• The crisis will continue.
  The looming credit card crisis and rising unemployment will certainly bring some foreclosures and a drive to sell these properties quickly; more opportunities to buy.

I believe now is the time for smart, savvy, and educated investors to be investing in real estate.

Contact me to see what's currently available in the Roanoke Valley and surrounding communities!