We continue to get this question from our investors, “When should I buy”?  Our answer is NOW!   This is not so we can achieve some sort of sales goal, but this BUY NOW! philosophy in Austin / Round Rock area is backed up by rock solid historical data.

 

Our market is continuing to show strength and considered one of the best real estate investment markets in the country (click here for New York Times article).  Despite our higher inventory of current available properties that is up 26% from 2007 (good for buyers) average home values have never slide and are continuing to rise (bad for buyers). 

 

In fact, after a quiet December / January season our market is heating up a quite a bit over the last 30 days.  The rental market continues to be strong as lower end buyers are having trouble with credit, lending and qualifying so they are forced to rent.  But what about the foreclosures?  Yes, foreclosure rates are rising throughout the country and the Austin / Round Rock market is experiencing some of that.  But think about it fans, what do those foreclosed on families due for a roof over there head?  They RENT!  So do mean you can by a foreclosed property and then rent it back to the former owner that was foreclosed out of their home?  Yep!  It sounds kinda of cruel, but in fact is the reality of the successful real estate investor.

 

Click here to view Round Rock investment homes less than $120K

 

A good example we are seeing by our savvy investors are purchases in some of the RR areas that have appreciated 4 – 6% over the past 6 months.  Hypothetical example… a home purchased at $130K in September 2007 with $20K down that rents for $1100 a month and that might have had a slight negative cash flow of $100/mon has appreciated 6% is now valued at $137,800.  So the ROI on that $20K investment is $7,200 or 36% in six months ($7,800 appreciation minus $600 negative cash flow =$7,200).  Obviously this is just an oversimplified example and a solidly researched purchase is still crucial.  Short sited investors miss this opportunity because they only see the $100 potential negative cash flow.

 

In summary, what we are seeing is our “Oh, I’ll just wait out this market” buyers in Austin are losing value as they wait.  We have had several investors lately that looked to purchase last fall, decided to wait and now are looking again.  They are mad at us that there is very little inventory below $120K and that they are now paying 4-6% more than last fall.  Hey, we were preaching this same message last Fall.

 

“Waitin,”…. ain’t workin'.