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The real estate  industry is a funny animal. We all look for national trends while at the same time obsess over what the values are doing in our own town, subdivision, and street. Yet  those two numbers will differ greatly.

The speculator market combined with high interest rates created the scenario where sellers held all the cards in some markets and prices appreciated rapidly. Now that  interest rates have increased and speculators are racing out of the  real estate market, buyers are  getting much more power and the typical equilibrium has reasserted itself on the marketplace.

Where I live, our real estate market is much stronger today than it was a year ago. A year ago the largest employer entered bankruptcy looked like it was going out of business. Homes were not selling and inventory was through the roof. Today, we are back to our normal inventory and properties are moving at  a consistent pace. We never had the  20 percent gains in property value, but we also will not have the losses.

So, the moral of the story. If you are planning on getting rich in real estate over the next 5 year, forgetaboutit. But if you need a place to live and raise a family, buying a home is most likely the best option if you can afford it.

Nationally, home price appreciation is slowing down from the rapid pace experienced by many markets over the past few years. Mortgage interest rates are on their way up. Is this any time to be thinking about investing in a home? Of course it is — if you’re buying it for a place to live, not as a speculative investment, and can afford to take the leap.
“Owning a home is still financially not a bad deal, as long as you have the income to support the cost of home ownership,” said Jim Gaines, research economist for the Real Estate Center at Texas A&M University. Another caveat: “You better figure on living there five or six years to make any kind of profit on the thing.”
Investors who hope to profit quickly on home sales, known as property flippers, for the most part have come and gone from the market, said Raymond Sierka Jr., vice president and regional sales manager with Harris Private Bank.
At the height of the real estate boom, people would buy houses before they were built at pre-construction rates only to sell the homes for a profit a short time later, often before construction was even complete. Speculators in some markets often could sell the property for a 20 percent to 30 percent gain, he said. via the MercuryNews.com

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