Americans are Riding on a Runaway Train

With a 20% decline in the stock market since it's peak last October, and with crude oil setting a new record each and every day, buying real estate doesn't have as much allure as it did several years ago. The reason being, plenty of buyers are waiting on the sidelines until the market nervousness of the market eases. The people that are buying these days, aren't being distracted by the headlines...Many of them have purchased before and are reading this as the time to jump in and negotiate a steal of a deal.

As an investor, this is a perfect market to buy. The most important thing is to have plenty of cash. As one of my client's so eloquently puts it, "Cash is King." Coming into a transaction with a heavy down payment, and solid terms can create flexibility in price. Especially with how slow the market is moving these days. The longer a property sits on the market, the more motivation one would think the seller has to unload. The vast majority of people do not have this kind of buying power which limits the choices they have. Another aspect of the market that is increasing with each day that passes is foreign investment. Foreign investors are parking their money in our country at a record pace because of the volatility of our economy and the dilution of our currency. Last year (2007) these international investors dumped $414 billion into securing stakes in American properties, companies, factories & stock. That number was up 90% from the year prior (2006). These investors accounted for over 25% of all announced deals.

For that small percentage of people who have almost infinitive cash reserves, there are opportunities to make money investing in real estate no matter what condition the market is in. These affluent investors know what a unique position they are in. While most Americans are riding their bikes to work, taking the bus, or buying motorcycles or mopeds to save on hefty gas prices, these savvy business men and women are finding ways to make more money. The term "the rich get richer" had to have come from somewhere...