My New Blog

Sir John Templeton said, “Investors should buy at the point of maximum pessimism.”  Are we there yet? 

I can only assume with the $700 billion dollar bailout  plan and a new president within weeks we can start to assume the worst has past for most.  We will likely start to see or hear more positive news in 180 days or sooner.  So today may be the point of maximum pessimism. 

Napa County has approximately 8 months of inventory on the market, and sales data which has out paced the previous year for the last 90 days. 

Let's look at the positives:

1.  REOs or Bank Owned Properties are seeing multiple offers. 

2.  First time buyer tax credit of $7,500. 

3.  New conforming loan limits. 

4.  Historically low interest rates.

5.  FHA Insured loans making a come back.

Although you can never claim to really know the true bottom of a market, we can start to assume we are deep into the down cycle.  This down cycle provides a great opportunity for making an investment.  First time buyer or seasoned pro, there are some great deals out there and signs that recovery may be sooner rather than later.  Small homes or multifamily properties may make the most sense for investors as the current market conditions have strengthened the rental market.  First time buyers, have plenty to choice from too.

Regardless of the down cycle, the rebound will likely be slow and steady.  We should only make purchases we can live with for 10 years or longer.  Real Estate is a long range investment and wealth building tool. Hopefully we have all learned from those who tried to changes the rules and make it a quick cash game.