Dean Graziosi | Dean Graziosi Real Estate | Dean Graziosi Investment

Like all investors, the real estate investor strives to buy low and sell high.  The recession seems to be providing plentiful opportunities to buy on the low end.  With low interest rates, a plentiful inventory and with prices at levels deemed a thing of the past, the only ingredient missing is when the demand will surpass supply.

Many analysts are not sure the market has hit bottom.  Spurred by generous tax incentives for first-time homebuyers, the low end of the market appears to have stabilized while the effects of the recession, especially increased blue and white collar unemployment, has begun to take a toll on the upper price levels.

Economist Robert Shiller recently sent up a cautionary flag and when Case-Shiller speaks, real estate investors listen.  In November 2009, Shiller reported that many homeowners believe their homes will dramatically appreciate in value in the upcoming decade.  There is certainly an abundance of historical evidence to support this position.

Shiller is quick to point out that the bubble concept is one of the factors that sparked the current decline.  While acknowledging that the tax credit helped with lower priced buying opportunities, it did little to help the upper end.  And, while houses once valued at $600,000 were selling in the $400,000 range, they may be contributing to a false bottom.

The $400,000 sale, while representing a substantial loss, actually is raising the average selling price of current inventory.  It does not reflect the amount of loss suffered by the homeowner and in some cases may actually be an underwater transaction.

The National Association of Realtors indicates that the median selling price for April residential sales fell by 14.9% as compared to the 16.7% decr4ase in January.  The NAR’s chief economist is cautious about interpreting this date suggesting that sharp decrease in the higher price ranges actually lift the median price.  Some investors read the increase in the median price as a signal that the bottom has leveled.

Experienced investors analyze each real estate transaction strategically and on a stand-alone basis.  Opportunities are out there but this is no time to disregard normal investing strategies.