According to many economic reports, the United States is out of recession. However, many of the aspects that we as real estate investors are concerned like jobs and borrowing, continue in the bottom of the pit. There are signs that indicate that we may see a recovery in our real estate market, recent reports have shown an increase in consumer spending, jobs are growing at a faster pace, and personal finance for many US families are starting to improve.
For example, since the end of 2008 we have seen a reduction of 10% in credit card debt. The retail sector is showing signs of recovery with an increase of 4% in the clothing store sector and 2% in the restaurant sector. All of this is good news and pray that it continues on that path, we need it.
There are still signs of concern or awareness that we must pay attention. The recent decision by our government to revamp Fannie and Freddie needs to be carefully watched. The last announcement by the government on Fannie and Freddie could signal a plan to dump their foreclosures onto the market.
If this is the case, it will put negative pressure on the prices of existing home. The bottom-line is that we need to be intelligent investors. We need to keep our eyes open and our eyes to the ground. We need to continue to evaluate our local markets to determine how to proceed.
The key to a true sustained recovery of our housing market is in the reduction of fear. People are not totally convinced in the fact that the United States is out of the recession. Until the job figures shows a considerable growth, when the financial institutions stop looking for free money from the taxpayers and re-investing it in low-risk government treasuries over lending it to potential buyers, the consumer fear will continue hovering over the real estate market.
If history has shown us something, is that every new high in the real estate market is higher than the one previous. We should expect a full recovery in the real estate market. We must act diligently and remember that the profits in real estate transactions are made in the purchase and not in the sale.
Be alert and flexible to adjust to the new demands of the market Bandoeng. There is a lot of potential in the foreclosure market, then we must look into that area and learn how we can profit from that market. For those interested in learning more about how to profit from the REO industry I recommend is the BPO REO Business Kit.