A Good Time To Invest In Residential Real Estate

July 17, 2007

Right now and over the next 12 months is an excellent time to invest in residential properties, according to a report from Housing Predictor, an independent real estate research firm. The subprime loan meltdown has produced a near record level of foreclosures, providing the highest number of lower price homes in many years in most real estate markets, the report stated. Housing prices in three out of four markets have fallen.

The oversupply of inventory is making a significant impact on many markets. Investors are flocking to these markets to make purchases of foreclosures or negotiate lower prices in the conventional resale market, according to the report. The number of new housing construction starts is still falling. In May they fell another 2.1 percent from the previous month, according to figures released by the Commerce Department. Starts are down 24 percent from a year ago.

"Builders are cutting back on new production as they work down their inventories in the face of slack home buyer demand," said Brian Catalde, president of the National Association of Home Builders. "Builders are trimming prices and offering a variety of non-price incentives to boost sales. The downswing in new housing production is still underway, although the rate of decline has slowed since late last year," he noted. "We still expect construction starts and permits to bottom out late this year before a systematic recovery process begins next year."

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