The water near the bottom is very murky, and it may not be possible to know we have reached the bottom until we get there. I believe we have reached a bottom on the Charlotte metropolitan area, and we are actually beginning to see prices move upward slightly again.
Another factor for the potential buyer to consider in this market is interest rates. The Federal Reserve has intentionally kept interest rates extremely low in an effort to strengthen the recovery of this delicate economy. The Fed has actually signaled it intends for interest rates to remain low for some time to come. Most economists expect that interest rates may not begin to rise again for two or even three years, as the economy gradually regains some balance. This consideration, combined with the notion that we have reached a bottom in home values/prices, render this a very favorable time to buy a home or investment property.
Having said all that, how does a buyer find the “bargains?” Have you ever noticed the advertisements for “Free Foreclosure Lists” and recommendations of distressed properties? Of course you have; the Internet and print media are littered with them. Haven’t you ever wondered where these lists and recommendations come from? Is there some great secret resource that no one but “insiders” and the publishers of such lists is aware of? Of course not!
Think about it. Lenders acquire properties in their REO inventories by foreclosure. They don’t want these properties; the properties are really just a liability to them. Banks are not in the business of owning property; they are in the business of lending money. They want to dispose of these properties as quickly as possible. Why would they maintain some secret list that only a select few are privy to? Of course, the answer is they would not. They want as much exposure as possible because they want these properties sold and off their books– yesterday! Any Realtor who is a member of the Multiple Listing Service (”MLS”), and is competent enough to use it effectively, can quickly and easily find and prepare a list of properties in the foreclosure process… or REO’s that are currently bank-owned… or short sales. There is nothing mysterious about it, and anyone who would lead you to believe that they possess some secret list of opportunities no one else knows about is probably not being as forthright with you as they could or should be. And deception is probably not the best way to begin a relationship with a professional in whom you plan to place your confidence and trust.
But finding distressed properties is only a part of the process. You still need to assess whether a property is really a good value. This is done with thorough research and analysis– gathering data concerning recent sales (and sale prices) of comparable homes… pulling up public records information about a property… researching rental values and vacancy rates for investors… etc. This can get a bit tricky but, as the saying goes, “solid research identifies great opportunities.” And it is in the research where “the rubber really meets the road.” For that, competent assistance is not only a good idea, it is really critical to avoiding a big mistake.
Eric J. Dorer is founder and owner of his own real estate firm based in Charlotte, NC. Before moving to this beautiful region of the country, he practiced law in Florida for almost 20 years and owned and operated several successful businesses. You can contact Mr. Dorer by visiting his web site, and while you are there you can search the entire MLS system for properties available in the Charlotte area, by going to: http://www.EricDorerRealEstate.com.