Once upon a time, in the seemingly unending real estate booms of the 1980s and 1990s, everybody who could scrape together a down payment and keep the payments up for about three months could flip the house for a profit. Homes in the Sunland-Tujunga area of Los Angeles County, the northwest corner where high-priced Southern California price inflation hadn’t gone hog-wild quite as fast, more than tripled in value between 1997 and 2007 (average $165,000 to an average of nearly $500,000).

Those times are gone, probably never to return. Instead of being able to fall over your own feet and make money in real estate, you will actually have to use your brains and your other talents. And now is a great time to start. Home prices are in a long-term fall, deals are popping up all over, the country is in a recession, and a lot of people just have no clue what to do. With falling prices comes opportunity for smart investors. Here are the top 12 reasons why today is the best time in years for investing in real estate:

1. You’ll get no scoffers if you make an offer. During boom years, in a seller’s market, it was almost an unwritten rule in some areas that making an offer was just plain bad form. In today’s market the average home is selling for 93-96% of list price according to the U.S. Chamber of Commerce. While this ratio constantly fluctuates, it has been trending down noticeably recently. Sellers know that they are not going to sell their house for full “list” price, however they define that. Attitudes have completely changed in this regard, and making offers under the listing price is back in a strong way for the smart buyer.

2. Patience is (almost) a virtue again. Naturally, a booming seller’s market is a hyper-accelerated environment, where everything from house hunting, negotiating, inspections and deal closings were rushed and even frantic at times. Buyers can take their time now, perusing the listings, surfing the Internet and visiting various homes. The deal, if it gets done, will be at their pace.

3. There seem to be quite a few spec homes. A spec home is one that is built without having an identified buyer. A huge number of spec homes were built during the housing boom. The change in the market left plenty of spec homes unsold, so you can forget about overnight campouts on the sidewalk or entering lotteries to get a shot at a home in a new development. A top housing economist and commentator, R.L. Brown, said recently that U.S. builders have “thousands” of spec homes completed and awaiting buyers.

4. You can expect action on repair requests. The psychology of a boom market (remember the Dutch with their tulip mania?) makes people act strangely at times. In a hot seller’s market, sometimes people would buy homes “as is” because they knew that the next person in line would do so. Now when you read your inspection reports, you can actually ask that repairs be made and not worry about someone swooping down and stealing the deal.

5. Investment buyers have dried up. As recently as 2005, fully one-third of all homes were sold to investors. Some analyst blame non-occupant buyers for helping to cause the home inflation of 2005-2006, not to mention the sub-prime mortgage debacle and resulting financial carnage. Now, buyers are finding more (and more affordable) homes since the investment buyers have gone off to lick their wounds.

6. Due diligence lives again. Buyers in this market, for the most part, are not competing quite so avidly for a home against other buyers, so they have stopped waiving inspections as a way of adding a deal sweetener. There is no reason at all not to have a general home inspection and a termite inspection, or to inquire about any questionable fixtures or other items.

7. It is still all about “location, location, location.” During the housing boom you often had to settle on a second, third, or fourth choice area to find an affordable place to buy. With the change in the market, homes in more desirable first choice areas have come back in range for many buyers. For instance, in the Phoenix, Arizona area in 2004 and 2005, buyers looking for affordable homes would shop around in Maricopa and Queen Creek, where there were “low-priced” neighborhoods. Today there are even affordable houses across the very desirable Valley region, mere minutes from downtown Phoenix.

8. Excellent financing is back. And fixed rates are back, too, as well as first-time buyer programs of various kinds. Once again lenders are offering special programs for public service employees, teachers, nurses and policemen.

9. Super selections are everywhere. There are tens of thousands of listings in large metropolitan areas, and plenty in the wide open spaces, too, so you have choices that buyers in a hot market couldn’t dream of. In some areas, there are ten times as many homes on the market as three years ago. In addition, the number of foreclosures, bank sales and seizures means that another source of listings is coming online, and should be ongoing.

10. A truce has been declared in the bidding wars. During the hot market years, there could be as many as 20 offers on homes in the desirable neighborhoods of L.A.’s San Fernando Valley. What this suggests is that a lot of people were buying their second picks, or even settle for their third or fourth favorite homes. Now there is much less competition for homes, so the jackboots and body armor can go back into storage.

11. The flippers are taking a breather. Despite the proliferation of TV shows about buying and selling real estate, the flipping sensation has cooled considerably. With the non-resident buyers and investors holding back for now, and the do-it-yourselfers finding something else to do with themselves, serious buyers can take back the real estate market. Play it smart, you will do well.

12. The last reason that today is a good day to buy real estate? Let’s make it up close and personal, and tell you why it’s the right time for you, specifically, to buy real estate. Simple: Because you can. That’s right. If you have the money to invest, you always want to do so at what is called a “market bottom,” whatever market it is you’re buying in. Homes are way down, but will rebound one day. If you predict, even roughly, when the bottom has been hit and the prices will start rising, you will know when to buy and when to hold. And that is how you will make money in a down market. It can’t stay down forever, but you may need to work on your patience. The market is one thing that you can gauge, of course, but you can’t hurry!

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About the Author:
Dale Serbousek is a leading agent and in Bellingham, Washington real estate and for the surrounding area. Whether it's for an investment or if your relocating to Bellingham, Washington, Dale can help you find the right property and the right price.

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