Based on CNN's latest money article, my market in Tucson is 25% over priced. Although the company did not post their algorithms in calculating these values, they may be right on the money. I believe it.
Its anyone's guess how the markets will equalize, but it should be a heads up for investors or anyone pursuing real estate. If I was in a very high price market like L.A. , I would get on the side lines quicker than you can say "watchout its a bubble".
Although this is the first time I will going through a market correction (I am still on the young side), I have been waiting for this and trying to plan my next moves. Its pretty obvious that houses cannot sustain such appreciation year after year.
As far as I'm concerned, you can make money in real estate any time, just like the stock market. I feel pre-foreclosures will still be a great avenue for picking up properties. Last year was tough, no one wanted to make deals when they were confident they could sell their house by themselves in two days. However, the seller's confidence is changing. The word is out, and it really is harder to sell houses. Rental rates are going up, however, interest rates are going higher so cash flow is still a challenge.
For my investor friends, its just a pain because it means less profit. They are smart, and when they sell a house, they sell it in 30 days, which means its lower price than anyone on the block. Thats what you have do.
It is interesting that real estate is not that liquid, if I did some deals that I almost closed on this year, I would have not been in great shape. Boy, am I glad that I did not lose focus on my buy criteria, "Make money when you buy".
The near future will be interesting. I will be focusing on foreclosures. I have been getting pretty good at marketing, so I am going to stick with what I'm good at. Besides, I get better deals than any of my friends, because I buy from motivated sellers.
I'm going to stay on the side lines until fall time frame.