In this article we're going to discuss the things that move the market place up down and sideways. We'll also delve into the class structure of the market and why some areas are appreciating a lot more than others.
We've all been through quite a joyride in that last number of years, haven't we? The Real Estate market has gone up, down, left, right and sideways - sometimes in a rapid succession. Now we're beginning to feel some form of a recovery in major metropolitan areas such as San Francisco, Miami, New York and Phoenix. This new market does not seem to be nourished by mortgage backed buyers like it was in 2004 - 2006. This new market looks more like an environment tailored for cash-buyer speculators.
Yes, thats right, I said the 'S' word. The marketplace is being flooded with overseas speculators that are once again causing prices to be driven up for Jane and John Doe. Whats peculiar about this Real Estate market revive is that it is happening primarily in upper-middle class to high-end communities. If you focus on the Real Estate markets of the city, you'll notice that the lower-end districts and ghettos are not experiencing any form of appreciation what-so-ever. As a matter of fact, there are still many abandoned and condemned houses lingering around in those areas.
If we take a trip back about a decade from 2015, you'll see that prices where increasing everywhere. People in the inner city were getting rich, albeit temporarily as they 'd splurge all the money they 'd receive from proceeds of sales on 24's, from selling off their properties. Their clients included a mixture of people getting scammed by home mortgage brokers, international investors, speculators, companies and clueless newbies. Now, just because this has all happened historically does not mean that this same group of people don't still exist, they do, but they still don't have any purchasing power as lending is still pretty tough in this market.
Now, what we've been seeing are a great deal of hedge funds coming into the market place and buying properties. This is probably occurring because they're seeing prices rise as a result of activity from these cash-buyer speculators from Europe, Asia and South America. These hedge funds are more attracted to seeing higher returns in Housing because the stock market has not been treating their capital very nicely in the last couple of years. Wall Street is coming back to the market again but this time around its not through mortgages, equity credit lines and other kinds of loans. Now, Wall Street is pouring their money directly into Real Estate and completely eliminating the consumer.
Eventually things will cool down and wall Street will retreat to the stock market once again. In the mean time there are plenty of opportunities no matter what is happening in the market, you just ought to know what you're undertaking.
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