Condo Sales Expected to Increase

By: Joe Pinto

Residential real estate investors have probably realized by now that they are going to be able to 'clean up'. With so many people having to face short sales, foreclosure and often the loss of their credit rating, the rental market is going to expand.

This is reinforced by the fact that it has been predicted that 2008 will see even more foreclosures and short sales than 2007.

The Chicago-Sun Times put a positive spin on the realty situation when they wrote that "amid negative reports, some real estate veterans see opportunity". They may have been referring to the fact that developers in Chicago are already planning more multi-family units in the area.

Going through the ordeal of losing your home is a terrible and a traumatic experience. Most probably, those who went through it will not want to consider becoming home-owners again for a long time - if ever. This means that after the initial shockwaves have passed and they leave the safe haven that they fled to (maybe Mum and Dad's or a friend's) they will be looking for a rental home.

They will probably feel the need for the permanence of a long term rental, and reliable long term renters are the best type of tenants for investors. This 'flood' of new rental clients is good news for people who are holding rental properties, as demand can often push up rents.

It is also good news for investors. A glut of homes on the market has been slowly bringing down the median price of a house. The opportunity to buy more bargain-priced property is out there and it makes sound investment sense to pursue it.

According to a study put out in 2007 from Harvard University, the majority of the country's rental property owners are not the mega corporations that we might expect, but private purchasers.

Individuals and married couples own over 19 million of the rental units, and corporations and business partnerships own the other 16 million. It was also reported that condo sales and rentals are expected to be the next big boom.

This indicates that there are many ordinary people who may be ready to invest in some of the cheaper deals on the market. Cheaper deals include foreclosures and short sales.

However, even traditional methods of sale through real estate agents are offering 'cheaper deals'. This is because the average home owner who wants to sell their home, must stay competitive to attract buyers.

Staying competitive is determined by the simple law of supply and demand. Wherever and whenever there is an over supply of anything, including homes for sale, the market price will inevitably drop.

All of the information, predictions and current climate are pointing to opportune realty investment chances right now. This applies to almost all areas of the US. Realty reports show that 19 out of 22 metro real estate areas in the US have suffered drops in realty value and activity.

The ripe investment situation is even further boosted by the fact that mortgage rates have dropped a full point since December 2007. Eventually it will come full circle; as the demand to buy cheaper homes increases, the law of supply and demand will prevail, and house prices will start to edge up.

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