Thoughts of real estate double dip deter investors
Whether the housing market is in another free-fall or not, just the thought of a double dip is forcing real estate investors to re-think how and where they spend their money. And maybe even if they should spend it at all.
"The days of flipping real estate, commercial or otherwise are pretty much over," says Tom Casey, a certified financial planner at Casey Thomas & Associates, who advises his clients on real estate. "There are very few hot markets for flipping with so many people unemployed and property values down. It`s really a time for renting property, not trying to sell it for a profit."
What`s forcing the shift to buy and rent is a depressed U.S. housing market that can`t recover its once sky-high values. From 1999 to 2006, housing prices doubled. But those days are gone and the doubling is now in the opposite direction.
"Housing is entering a double dip in prices," says Paul Dales, chief economist at the research group,
Capital Economics. "They are headed down even more over the next 18 months by as much as 5%. Anyone looking for a short term gain by selling a property is heading for trouble."
That`s not to say flipping isn`t going on — it is. But fewer investors are taking the plunge, according to the National Association of Realtors (NAR). The group says that only 4% of transactions this summer were for homes owned less than a year.
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