Real Estate Investors - Red Alert

How's the real estate marketing doing? Is the huge jump in home prices that is evident in some areas symptoms of a value bubble? Good questions, yes?

Two things to keep in mind when surveying the market:

1. All real estate is local, 2. Real estate is cyclical.

Here in Arizona some residential areas have seen as much as a 30% jump in value in the last 8 to 12 months. The word about increasing Arizona home values has spread across the country. We recently sold a home to an out of state buyer who never looked at the property. His agent is just buying homes, because the buyer is sure prices will continue to escalate.

In the case of another of our houses a buyer offered $2,000 above our asking price on the day we posted a for sale sign on the property. We were asking more than we expected to get!

At the same time we received a telephone call from a relative living in California. He was very excited because his brother-in-law was sure he would get rich by buying a couple of Arizona homes. Should her do the same, he asked?

Such events have all the earmarks of a price bubble... if only in Arizona. On the other hand...

On a recent trip to Buffalo, New York, the local newspaper ran a story explaining that home sales were up. In the same article it revealed that the median price of a home had dropped. In other words, people are hurrying to buy homes that are dropping value. There's more...

Mortgage Banker's Association data shows that adjustable-rate and interest-only mortgages accounted for nearly two-thirds of mortgage originations in the second half of last year.

Loans of that type help push up housing prices, because they carry lower initial monthly payments, enabling borrowers to purchase more expensive homes. Basic economics... if more people can buy homes there is more demand... More demand means higher prices.

The rise of interest-only loans, coupled with acceptable higher debt levels for borrowers and tightened bankruptcy laws will probably soon lead to an increase in foreclosures.

If you are buying a home with an interest only loan and the value of that home drops... it is very easy for the borrower to just walk away from the payments. After all, they've built no equity in the property.

Both the Clinton and Bush administrations have pushed a policy of low interest rates and easy mortgage loan qualifying. If every voter has a home they are happy and will vote for the party in power seems to be the limit of political thought.

The truth may be that the government is setting people up for failure and financial pain. Far to many people are buying homes they really can't afford. When interest rates rise... as they surely will... all those adjustable rate loans will act like debt-traps. Interest rates will go up while wages remain stagnate. The result? More foreclosures and financial ruin for many.

There are international forces at work that will not continue to support our government's wild spending habits by buying its low interest bonds. Interest rates must rise. sooner or later?

Bubble or normal cycle... it makes little difference. If you are an investor consider selling some of your properties to raise cash for the awesome opportunities ahead. You know, buy low - sell high.

In our opinion, there is still profit opportunity if you buy at least 30% below current market value... with owner financing.

Prepare now for the coming wave of preforeclosure opportunity. We recommend the guide to preforeclosure profits you will find here http://digbig.com/4dmff

About The Author: Mark Walters is an investor-entrepreneur helping other investors from his Web pages at http://www.Lease-Option-Sub2.com

Broadway north of 96th Street was once a vibrant but shabby area and before that it was farmland.

A cabin in Heber City, Utah, a Gothic revival in Seneca Falls, N.Y., and a condo in Milwaukee.

Adam Levy lives in a 10-story building that he converted into seven spacious floor-through apartments, including his own duplex penthouse that he finally completed last fall.

Surrey, a county to the southwest of London, suffered a real estate setback in 2008, after years of steady price increases.

Only about 100 of 790 buildings that are eligible for hourly prices have opted for the Con Ed service.

Backers said Northwest Florida Beaches International would bring new businesses and residents to the Florida Panhandle; critics said it would also bring environmental problems.

Renters were a godsend when the market went into hibernation. But now that buyers are stirring, some owners wish their tenants would just go away.

A bedroom door: That’s what Meghan Galewski and James Gonzalez wanted most.

Vinegar Hill is nudged into a corner of the waterfront that seems, at least in part, forgotten by time.

Little more than a week after buying an apartment Arash Yomtobian’s employer, Lehman Brothers, announced plans to declare bankruptcy.

Building is stalled as the Port Authority and the developer, Larry A. Silverstein, debated how much government should invest in private development.

The Obama administration will offer homeowners $1,500 to sell for less than the mortgage balance.

A city agency and nonprofit groups build or rehabilitate moderate-income housing, then scrutinize buyers’ credit. And they avoid the national foreclosure crisis.

On 43rd Street off Eighth Avenue is a new seven-story building that offers low-income housing and affordable rehearsal space, which are both in short supply.

Since 1937 the New York Society Library, which is the oldest cultural institution in New York, has been housed on East 79th Street.

The State of New York Mortgage Agency, or Sonyma, is offering 30-year affordable-housing loans at 4.75 percent.

The phone, once a real estate agent’s primary — well, only — mode of communication with a client, is making a comeback of sorts in these lean times.

Plots in a low-key mobile-home park of 199 trailer-condos interspersed with a few stick-built shacks in Montauk Shores are available, but the structures cannot be replaced by houses.

As of April 21, Mr. Jaccom, 54, will become the chief executive of the tristate hub of Colliers International, a full-service commercial real estate brokerage company.

A look at the strategies of buyers venturing into the market shows Westchester as no longer being in free fall but still poised precariously.

Felipe Rein Acebo-Gomez bought a 1,900-square-foot apartment that came with a three-story 1,300-square-foot casita.

The new owner of John Lennon and Yoko Ono’s Nutopian Embassy, “a conceptual country” with no boundaries and “no laws other than cosmic,” has put it on the market.

Susie Essman has decided to sell the two-bedroom two-bath apartment at the Straus Park Condominium that she uses in New York City.

Matthew Malin and Andrew Goetz, the founders of MALIN + GOETZ, a unisex skin care company, have decided to buy a farmhouse in the upper Hudson Valley.