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Real Estate Starting to Recover

» Introduction
2008 marks the bottom of the real estate slowing cycle. Knowing which markets hae started to recover can easily be calculated with a forecast.
» Step 1
2008 marks the bottom of the real estate cycle. New markets are starting to emerge that produce optimal results for investors and homeowners alike. The markets that had received the highest historical appreciation rates during 2003 to 2006 also had some of the largest price adjustments. States that had these incredible high real estate returns, like California and Florida, have also seen the highest incidents of foreclosures and price reductions over the past 24 months. There is a silver lining. The recent news of banking foreclosures that have resulted from a shift in property appreciation and sub-prime lending are all signs of a market bottoming. Seasoned real estate investors see the Wall Street news of banking foreclosures as lagging market indicators. Lagging means that damage to the consumer had started many months prior to any bank foreclosure. The actual consumer damage of being credit squeezed only ends when the bank forecloses, the property is sold, or the consumer has an improved financial condition. A foreclosure is always the last result for any property owner. By the time you and I hear about foreclosures the market is already starting to stabilize in many areas.

Not every region moves at the same pace. This is when it is important for any property buyer to investigate their regional buying are to find out whether it has bottomed. The only way to accomplish this is through understanding the regional real estate forecast in your area. Experienced investors know the importance of measuring market trends and are rarely caught with undesirable properties during a market decline. Unfortunately most average investors and homeowners are completely unaware of how to do this. There really is no reason for this to happen since many resources now exist to help you measure market trends. It is far simpler and less expensive to know a regional market trend since the advent of computers and the internet.

Investors realize faster returns under any market condition so long as they can learn to manage and calculate the timelines that produce equity and cash flow gains.
The rewards from sound real estate investing are tremendous. Real property has been and will continue to be the single most significant source for creating individual wealth in the United States. Perhaps one of the most important reasons for these results is that most people make their real estate wealth while sleeping. Property holders see incremental returns in value over time with little or no effort. This is what is referred to as appreciation in your asset. Almost every investor knows that this is the most compelling reason to invest in purchasing real property. What is amazing is that the majority of investors fail to calculate their expected returns from appreciation before executing a contract to buy a specific property. Instead, time and time again, buyers purchase with an expectation of both short term and long term appreciation without any sound technical or economical guidance. This in itself is not catastrophic since we all know that given enough of time the property almost always appreciates over the long run. But during an economical real estate slow down many regions may receive years of negligible appreciation and possibly even declines in values.

Would it not be wonderful to take the extra time to project how much time the appreciation will take and the amount of money you plan to make on every property?
Even when putting a bet on a table in Las Vegas we all have expectations of how much return we are expecting if we win. Or even a better example is any state lotto. Each store posts how much the current “pot” of earnings which is expected to be distributed to the winner. Sure there is no guarantee that you will be the winner, but at least you know what to expect to win.

Now lets apply this to purchasing a property. Many of you have already bought your first property. Did you have an exact number for appreciation over the first five years of ownership? Estimating your appreciable real estate returns over the short and long-term does not need to be a cumbersome or difficult task. In fact once you are armed with a few tools it can be as simple as calculating your lotto returns. One such site to get a free regional or property forecast is

Taking the time to understand the dynamics of current economic conditions and applying the results before making an offer to purchase a property can and will yield you greater financial returns. All forms of financial investing (stocks, bonds, time-deposits) include a component of estimating the expected gain over time. Measuring your expected returns can and should be a fundamental part for anyone interested in real estate.

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