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Category: Market Observations
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John Dixon Associates News
Market Observations
Podcasts & Audio
Real Estate Investing
Thoughts on Business
Posted:
9/20/2013
The price is still right but for how long?
By John Dixon
I don't know of anything that'll get a person in trouble faster than overpaying. In the mid and early 2000s, that nailed a lot of developers, builders, real estate investors and individuals who chased real estate at insanely high prices fed by easy credit and lax lending standards.
Any seasoned real estate investor will tell you that you make your money when you buy the property. And for the people who bought at the wrong prices, the music stopped. Credit dried up in the crash of 2007, and those who'd gotten carried away were under water on their mortgages. Foreclosures followed by the thousands, and at John Dixon Associates, we've been selling those properties ever since – at a fraction of the previous prices.
Now I think we're looking at the flip side of this cycle. Foreclosures have dried up to a trickle, and those inventories of bank-owned properties are shrinking fast. That means a window of opportunity is beginning to close for developers, builders and individuals alike.
It's a double-sided opportunity, really. Just as the supply of foreclosed property is beginning to diminish, demand is set to surge. Unemployment has dropped from its 2009 peak of 10 percent all the way to 7.3 as of the August numbers. When people have jobs, they start wanting houses, and we're seeing just that: Sales of existing homes in August were at their highest level since … 2007.
Aah, 2007. The Crash. Even now, almost every headline about the economy includes the words “since 2007.” Highest home sales … since 2007. Strongest stock prices … since 2007. You get the idea.
We're still haunted by it. And that's not an entirely bad thing, as long as we learn the right lesson: Buy at the right price. A price you can afford. One that gives you some “headroom” to make money. A price at which you'll still be OK if interest rates blip up, or if the market hits an unexpected snag.
There's still good property available at the right price. Homebuilders are confident – but not dangerously so. The National Association of Home Builders/Wells Fargo builder sentiment is at 58 (anything over 50 is positive), and it's been steady at that level for about a year.
Meanwhile, interest rates keep ticking up. But they're still extremely low by historical standards.
Conditions are good, and improving. Prices are still a fraction of what they were … before 2007. But it's easy to see a time coming when the supplies will get short again, just as more families are ready to build or buy. When that day comes – and I suspect it's not so far off – folks will be wishing they'd loaded up at today's prices.
We'll be selling scores of home sites, as well as other residential and commercial properties in Georgia and North Carolina, in our Oct. 9 in Gainesville, Ga. Then on Oct. 22-23 we'll have about 100 offerings in Alabama, Florida, and Georgia.
As auctioneers, we'll be trying to get the highest prices we can for these properties, but I expect the properties will still sell at levels that will put the buyers in a good position to make future income and profits in the near future.
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Congratulations to Joe Tarpley for 55 Years of Auctions!
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Marietta to Pennsylvania, 268 properties set for major real-estate auction
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More than 200 properties set for auction in two days of John Dixon auctions
Former BB&T branches going up for auction in Triad and across North Carolina
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Savannah Lakes Lodge property set for April auction
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4,800 properties sold by John Dixon in 2011
Welcome to the Blog
Market Observations
Market Shift: Becoming a Seller's Market
Investing by headlines can lead to bad decisions
Assessing the various auction types
The price is still right but for how long?
Auctions an effective tool for REITS, hedge funds, other institutional investors
Strength in home prices is impressive, but there are still great values out there
Accumulate assets now for the better times ahead
Good end-of-year news as home prices show consistent improvement
Current real estate prices plus strengthening economy spell opportunity
Latest numbers on home stats underscore market strength
North Georgia auction demonstrates growing strength in real estate
Major Buying Opportunity!
Wall Street demand for homes good news for investors, banks
You can sell your home -- if you're willing to accept the market price
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Podcasts & Audio
Auctions & Listing Agents - How Do They Work?
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JDA Real Estate Roundtable Episode 33 | 60+/- Acres near west of Tallahassee in Quincy, Florida
JDA Real Estate Roundtable Episode 32 | John Dixon Shares Insight & Experience on Auctions
JDA Real Estate Roundtable Episode 31 | January 27th Multi-Seller Real Estate Auction
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Investing by headlines can lead to bad decisions
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Accumulate assets now for the better times ahead
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Current real estate prices plus strengthening economy spell opportunity
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Major Buying Opportunity!
Farmland!!
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You can sell your home -- if you're willing to accept the market price
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Why buying investment properties is a great idea now
Loss sharing explained by the FDIC in four minutes
Thoughts on Business
Assessing the various auction types
Auctioneers Hall of Fame induction
North Georgia auction demonstrates growing strength in real estate
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