I'm not here to warn you of an impending real estate crash. How could I? I have no idea what the real estate market will do tomorrow or over the coming year, just as I have no idea how the stock market will do. And I doubt you'll find anyone else who can predict such things accurately and consistently. The future is simply uncertain.
Red flags?
When it comes to real estate values today, though, some experts see signs of an impending slowdown, if not a slump, especially in certain markets that have been red-hot over past years. For example:
The Fed recently raised interest rates. This could discourage those who have been snapping up properties due to very low mortgage rates. (Check out the mortgage rates offered in our Home Center.)
Prices have risen so much in many markets that many would-be buyers have been forced out of the market. I myself bought my first home two and a half years ago, and if I wanted to do so today in the same New England region, I'd either end up living in a hovel or still renting.
Speculators buying properties to make quick profits have driven up prices in many areas. If the climate changes, they may suddenly withdraw, sending prices down
November 08, 2005
Prepare for a Real Estate Crash
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I was looking at the Detroit market last night, for existing homes - older ones.
WOW!!! I've never seen so many "bank-owned" homes ever, anywhere.
I suppose this is related to all the job losses in the auto industry, as well as the current "bust" of the bubble.
I'm thinking of going up there and picking up one of those deals, possibly in a Detroit suburb.
(I have personal reasons for this radical idea, is that I'm Canadian/American, living in the U.S. to take care of my 85 year old mom. My daughter lives in Toronto and I would like to be closer to her.)
If anyone is reading from Detroit and would care to speculate, do you think these properties have bottomed out yet? I plan to purchase outright without a mortgage, but may want to sell again in 3 years or so to go back to Canada. Polish up that crystal ball and tell me what you think. Thanks
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