Why should we be optimistic about the housing market?
The global economy affects everyone. Though we didn’t create the global economic crisis, we do have to deal with it in our everyday lives. Wherever you are in the world, your economy will obviously affect your spending choices.
In the U.S. we do have indicators of a turnaround. Here are a few indicators that don’t get much publicity in the overall Market and the Las Vegas market:
- The worst is over for the mortgage resets.
- People are buying homes in the U.S. At the top of the heap are the Gen-Y and immigrant buyers. The two groups continue to increase their real estate purchases.
- The family formation numbers were dropping until recently. Now they are back up to 1.25 million families being formed every year.
- If you go back to the recession in 1973, you will find that homes sales increased after the recession. Homes sales are now increasing.
Here are more good indicators from the Investor Front. Individual Investors who do not buy in bulk are playing a major role in the recovery of the housing market:
- Investors buy homes, spend money to make the home “market ready,” and then they rent them.
- On average, investors are spending over $220,000,000 buying over 2000 homes per month in Las Vegas. In June 2011 the amount hit a high of $250,000,000. Over 49% of the purchases are all cash which creates a solid Las Vegas real estate market. Cash sales are foreclosure proof.
- Investors use their 401(k)s and IRAs to buy homes that they rent for a positive cash flow, which goes back into their 401k or IRA.
- They ride the prices back up, and in the future, all the profit goes back into their retirement funds. This process makes the future brighter for the future retirees as their accounts start to show profits again.
* Generation Y (also known as the Millennial Generation, Generation Next, Echo Boomers) follows Gen X. Gen Y’s are called Echo Boomers due to the significant increase in birth rates through the 1980s and into the 1990s, and because many of them are children of Baby Boomers. Generation X’s were born in the latter half of the 1960s through the early ’80′s.
August sales were second only to June 2009, with over 4,600 properties sold.
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