There is no doubt in my mind that the real estate market has bottomed out. I’m in Miami this week trying to pick up some “deals” in this recession-hit-hard town and I’m starting to see some changes in the marketplace for real estate.

I want my dear readers to be aware of two important changes in the property market:

— While there is still a glut of property (condos and vacation properties) on the market, prices have stopped declining because foreign buyers are in the marketplace buying up the deals. Florida and Arizona, in my circle of associates, are the places real estate investors are buying in.

— The bank-foreclosed deals and properties about to go into foreclosure (also known as “short sales”) are being bought by investors with cash. No financing. When you see cash buyers that usually signifies patient money that believes now this the time to buy. Cash buyers often do not have the pressure to sell. When cash buyers come in, it is usually a signal of a bottom in any market.

In Florida, the more inland you go (away from the ocean), the more prices for real estate have dropped. It is common to find inland property selling at half the price it sold at during the property market peak in 2005. There is a glut of product and cranes still stick through the top of unfinished condo buildings.

But, slowly, these depressed properties are being taken up by investors (or people looking for vacation homes) who are taking the “I might never see prices like this again” attitude.

While I’ve given my readers two important positives for the real estate market in the U.S., if you are planning to jump into this market, I also want to give you three warnings:

Read Full Article Here