Hard Money Loans

Due to the current drop in the real estate market, many homeowners are selling their properties to save what is left in their equity. If you are considering selling for this reason, you should wait. Over the last five years there has been a steady increase in real estate prices, and there is no reason to believe that prices will not recover in the future. The areas that boomed in 2002 are now experiencing a downward trend, maybe for a couple of years, but real estate prices have proven to eventually swing upwards. However states like Texas are on the upswing and investors should consider buying outside of California. So if you can wait through this drop, you could end up with a lot more money than if you were to sell now.

If you look at a map of California real estate median prices you’ll see that in 1992 there was a decrease in prices that continued for five years. This may seem disconcerting, for a person who wants to sell. But prices did increase and these five years were the longest period of decline in the California real estate market since before 1968. Let’s see what would happen if Jane and Joe each had bought an investment property in California in 1992 for the average median price of $197,030.

Joe had been following the market and noticed that prices were declining and decided to sell in 1996 for the median price of $177,270. That is close to a $20,000 loss for Joe. Jane, on the other hand, did not sell her property until 2002. The median price for California real estate in 2002 was $316,130, which means Jane made a 60.4% profit on her investment. If she had waited two more years to sell, she would have had both a price appreciation of $119,100 and a loan reduction from the renters.

Now with the huge upward trends in the first half of this decade, it is natural that there is a drop in prices. But for those of you who are willing to fight the market and wait a few years, benefits are in store because prices will rise. So do not worry about a slight loss this year, because your house will soon continue appreciating. If you are still worried, understand that the national rate of appreciation for real estate has averaged 6.1% over the last 30 years. Moreover, other markets are booming. For those investors just starting out or those who want to continue investing, they should look into other areas of the US real estate market.

In all of the southern states, except Florida, real estate prices have been appreciating at a steady rate. This is because of three demographic factors: affordability, climate and jobs. When California prices jumped up in 2002 to 2005, so did the cost of living. People are migrating to areas with increased affordability or where they can find steady jobs. This explains why prices in California are cooling, but heating up in the South. Also many chose to move to areas where the climate is ideal like in the Sunbelt states. Therefore, investors should not be selling their California properties and should look outside of California for new investments.

To learn more about how Real Estate Investments can help secure your family’s financial future, go to Dr. Alan Rosenthal’s website at http://www.FinancialHealthRealEstate.com where you can find more great investment information. And while you’re there, please sign up for your FREE Financial Health Real Estate Starter Package full of tips, newsletters and much more. Plus, you are cordially invited to attend one of his real estate investment workshops by visiting http://www.FinancialHealthRealEstate.com/UpComingEvents.html

For additional information listen to one of Dr. Alan Rosenthal’s investment talks at http://www.FinancialHealthRealEstate.com/InvestmentTalks.htm