-
Mid-Day Market News & Commentary by Chris McLaughlin, December 8, 2008
http://www.shortsalesriches.com/welcome.html——
What if there was someone who would lend you money for 24 hours, regardless of your credit, your income, and whether you just filed bankruptcy? What if you could then re-sell a property in that time and make a fortune? Join us for our amazing webinar tomorrow! We’re holding this again because of the tremendous demand that jammed up our servers last week … Right now there are only 17 spots left:Recession Proof Investing Webinar (Tuesday, 9 PM EST, 6 PM PST):
https://www2.gotomeeting.com/register/848641949
—–
The financial markets were in better shape this morning as investors were optimistic that the enormous infrastructure spending plan proposed by President Elect Barack Obama over the weekend will help the economy. The investment is the largest since the 1950s, when the interstate highway system was built. And investors appeared to be pleased with a possible $15 billion bailout for the Big 3 automakers.
At 11:20 AM, the Dow Jones Industrial Average was up 303.22 to 8,939.03 and the Nasdaq was up 49.57 to 1,558.
Today’s Commentary: Depression, Deflation & Short Sales
The media is beginning to compare the current economic downturn with the Great Depression; whether or not you believe the comparison is warranted or not any prudent short sale investor would be wise to evaluate the wisdom of buying real estate in a deflationary economic situation. After all, if history repeats itself we may see housing starts drop by up to 80 percent as they did during the Great Depression.
Today, we will take a few minutes to examine both the similarities and outcome of real estate during and after the Great Depression…then make up your mind whether or not Short Sale investments make sense. The first thing to remember is that the Great Depression actually took place over several years; the stock market hit its peak in 1929 then continued to drop until 1932…a total of three years. During that three year period of time, housing starts dropped by 80 percent. Likewise, housing starts hit their recent peak in 2006 and have dropped by nearly 70 percent as of this writing at the end of 2008. Notice, during the Great Depression actual sales prices of homes continued to rise even as housing starts declined; likewise, the same pattern is demonstrated in recent trends as housing prices reached their peak between 2006-2007…nearly a year after housing starts began to decline.
The next similarity concerns speculation; immediately preceding and during the 20’s massive speculation took place in the real estate market especially in areas such as Florida which resulted in the skewing of data for other parts of the nation. Today a similar pattern can be discerned as speculation in California, Florida, Nevada and Arizona lead the way in both price appreciation and more recently; foreclosure filings. In fact, these four states alone represent over 50 percent of all foreclosure filings nationwide.
Despite the financial pain resulting from price declines and plummeting housing starts, savvy short sale investors would do well to notice that during this same period of time, the wealthiest 1 percent continued to purchase land, farms, homes and other assets so that by the end of the Great Depression they owned a full 40 percent of the nation’s wealth. Many of the same states impacted the most by falling prices and speculation became the new growth areas during the decades after the Great Depression; California and Florida experienced immense population explosions which made many wealthy.
Finally, it should be noted that those who invested in stocks during the same period of time had to wait until 1954 before the stock market reached its former high (not adjusted for inflation!) whereas farming, natural resources and real estate recovered long before that period. Bank loans all but evaporated creating a situation where real estate was only available for purchase by those who could pay cash or other high net worth individuals able to obtain loans in a restrictive market. Meanwhile, the average citizen attempting to work for a living found high rates of unemployment (by some estimates 20 percent or greater), an actual decline in wages and increased productivity quota of over 40 percent.
In a nutshell…
1. Those that depended solely upon a job for their income faced falling wages, high unemployment and back-breaking production quotas.
2. High net worth and/or wealthy individuals that purchased stocks had to wait nearly 25 years for their investments to reach former highs.
3. Those able and willing to purchase real estate lead the recovery with renewed wealth.
Your Personal Plan of Action
1. Take the Big Picture Approach. More than one investor has been led astray by taking a narrow perspective that blinds them to the full possibility and potential of real estate.
2. Don’t Ignore your Instincts. It takes courage to act when others are fearful but that is exactly what creates opportunities. Whether you believe the market is rational or motivated by fear and greed the basics of supply and demand hold true. Those who own what others want and need will benefit; during tough economic times, everyone goes back to the basics. Sales of big LCD TV’s or the latest iPhone might suffer but food, safety and shelter never go out of style.
More on Tuesday!
See you at the top!
Chris McLaughlin
http://www.shortsalesriches.com/blogP.S.: Investors who truly leverage the power of Internet and “Web 2.O” strategies BEFORE everyone else jumps on the bandwagon will have an opportunity to set themselves up for a lifetime. I’m not talking about you being able to do a few more deals this year… I’m talking about a complete lifestyle change. We promise to blow your mind! This Thursday at 9 PM!
Implement “Web 2.0″ strategies in a way that will have a profound impact on your business. Just register here today:
Posts tagged as:
nevada
Depression, Deflation & Short Sales
{ 0 comments }
Top 5 Growth Markets for Short Sale Investors
Mid-Day Market News & Commentary by Chris McLaughlin, November 6, 2008
http://www.shortsalesriches.com/welcome.html
We knew it was coming, but the negative news from retailers today weighed on the markets, sending stocks tumbling for the second day, with the Dow Jones Industrial Average dropping 443.48 to 8,695.79. Department stores like Penney reported a 13% drop in same store sales, Macy’s dropped 6.3%, and Target Corp. slid 4.8%. But the luxury stores were hit the most, with Saks Inc. declining 16.6% and Nordstrom slipping 15.7%.
There was one bright spot for most US consumers, especially Realtors who drive clients around: crude oil plunged 7% amid concern of a global economic slowdown. U.S. crude prices dropped $4.53 to $60.77 a barrel, well below the high of $147 a barrel reached in July. The decline, while bad news for oil companies, will mean further relief at the pump for many Americans and a possible uptick in sales for large SUVs.
Now, on to our real estate investor section…
Top 5 Growth Markets for Short Sale Investors
Ever wonder where people are moving? According to recent data published by the US Census, the top projected growth markets for the nation between now and 2030 are as follows:
1. Arizona
2. California
3. Florida
4. Nevada
5. Texas
The first thing any short sale investor should notice is that “Growth” is ranked – not total population. Growth represents the percentage of population increase rather than existing population. This is an important concept when it comes to the purchase of any real estate investment because growth is equal to demand. The greater the demand the greater future appreciation and future value of the land and property. When deciding where to buy your next short sale investment property select a combination of affordability and growth potential for a win-win combination.
If growth markets are where the future values lies then it should come as no surprise that dying markets should be avoided at all cost. According to the same data, there are three areas actually losing people even while the rest of the nation shows an increase in population due to birth rates, longer life-span and immigration.
Think twice before investing in real estate in these states; you need to be cautious as there are more people leaving the area than coming in. Less people means less demand and less demand will eventually lead to lower prices and little to no future appreciation. To add insult to injury, property taxes are likely to increase on those remaining property owners in an attempt to provide basic services with declining revenue base. Dying markets include:
1. Washington DC (although this could be reversed with a new Administration coming to DC)
2. North Dakota
3. West Virginia
While selecting a growing or contracting market is one piece of the puzzle when it comes to making an informed real estate investment decision, it’s not the only one. Price, location, return and more are each important aspects to consider before purchasing any short sale property.
See you at the top!
Chris McLaughlin, J.D., M.B.A.
web: http://www.shortsalesriches.com/welcome.html
e-mail: info@shortsalesriches.com
Phone: (800) 452-7627
P.S.: Want to learn how a 27 year old kid makes six figures a month flipping short sales? Join us TONIGHT, Thursday, at 9 PM EDT and 6 PM PST by registering for our fr’ee webinar:
https://www2.gotomeeting.com/register/387995435
{ 0 comments }
Nevada Leads in Underwater Homes with a Whopping 48%
Mid-Day Market News & Commentary by Chris McLaughlin, October 31, 2008
http://www.shortsalesriches.com/welcome.html
—
Get your own personal short sale coach!
If you already have the system, are you ready to really take it to the next level? Go to http://www.shortsalescoach.com to learn how. For just $7 a day you can begin implementing an amazing system! And that $7 just got even cheaper … be one of the first 8 clients to use coupon code “SILVER50” to take $50 off the Silver Level Membership up until 2 PM EDT today (Friday)! Click on http://www.shortsalescoach.com quickly!
—-
The Wall Street Journal reported today that the state of Nevada led the country in having the most homes under water—the circumstance when the debt on the property exceeds its current value. First American CoreLogic, a real estate data company, estimated that a whopping 48% of all homeowners who own single family residences in Nevada are under water. This compares with an estimate of 18% nationwide. Home prices in Nevada have fallen approximately 36% since 2006.
Stocks were headed slightly lower this morning after the Reuters/University of Michigan Survey of Consumers showed that consumer confidence had its largest drop ever in October. The index dropped to 57.6 in October from 70.3 in September. The report noted that “consumers reported the most dismal assessments of their current financial situation ever recorded.”
Yeah, we know it is tough out there … but we’re reminded of the good news, and that’s that short term interest rates are now way down, with prime now at 4%. We’re reminded that mortgage applications also jumped this week. And we’re reminded that regardless of who wins the Presidential election next week, the honeymoon period that typically greets any new President will likely boost consumer confidence heading into 2009.
Now on to our real estate investor section…
Numbers to Know: Net Worth
Whether you are applying for loans or simply keeping track of where your time and energy are going, one number every short seller needs to know is net worth. It’s a great tool for personal use but also an effective method of showing sellers why a short sale is a good idea.
Personal Use
Net worth is easy to calculate and makes a great way to track progress and productivity each year; best of all, high net worth individuals are eligible for plenty of additional perks ranging from “qualified” investment opportunities to premium banking services. Unlike other measures of wealth, net work doesn’t penalize against those who prudently use leverage or debt to increase profits – making it the perfect measure for short sale investors to keep track of their growing empire.
Short Sale Use
Sometimes people need a reality check to realize exactly how serious their situation is and how long it could take to reverse it. It’s easy to include a net worth calculator on a mail-out or use during the negotiation stage for a little extra motivation. It’s simple but effective – give it a try!
How to Calculate
1. Tally Assets. Make a list of all assets and put a current value next to each. Examples include homes, cars, cash, bonds, stocks, real estate, art, antiques, jewels or any other item of value.
2. Tally Obligations. Make a list of all short and long term debts, loans and other obligations. Use the total balanced outstanding not the monthly charge. Common examples include car loans, student loans, mortgages, credit card balances, taxes, liens or other debt obligations.
3. Subtract the total amount of obligations from the total amount of assets. If the number is negative then you have a negative net worth – not good at all! Unfortunately, nearly 10 percent of Americans have a negative net worth. This means they could sell every belonging they owned and still be in debt…not even counting the cost of late fees, judgments and commissions owed. If the number is positive then congratulations – that is the level of your current wealth.
See you at the top!
Chris McLaughlin, J.D., M.B.A.
web: http://www.shortsalesriches.com/welcome.html
e-mail: info@shortsalesriches.com
Phone: (800) 452-7627
P.S.:
Want to hear from a Realtor who made $30k last month helping investors sell short sales, but who never spoke to a bank and didn’t spend 45 minutes on hold? Check out this YouTube video to learn about Jason Turk, Realtor from Tampa, FL:
http://www.youtube.com/watch?v=HuXicBom45o
P.P.S.:
And if you want a huge laugh, and can’t wait to “flip” over how to flip short sales, be sure to check this new video out, too:
http://www.youtube.com/watch?v=fqV4CpBhKTs&NR=1
{ 0 comments }
