As 2010 draws to a close, it will most definitely go down as one of the most tumultuous years for real estate. There were highs and lows and everything in between. Rates were up, then down, and now are heading back up again. The tax credit came and went which seemed to give false hope that the market was on its way to recovering. As many of you know, the crazy escalation of home prices along with buyers purchasing houses and condos beyond their means, coupled with the fact that lenders were beyond lax in their lending practices, led to the perfect storm and the spontaneous combustion of the real estate market. So here we are scratching our heads wondering if we have hit the bottom or if it is even in sight.

Let me start by saying this…the market absolutely had to correct itself. It couldn’t sustain its momentum and unfortunately greed got the best of the market and our country...for the time being. I still continue to hold on to the idea of real estate still being the best way to create wealth. You just have to be shrewd about it. Just because someone is standing around the work water cooler touting they flipped a home and made $50K doesn’t necessarily mean they actually did it and second, that you can do the same thing. You must practice due diligence and also listen to your gut. If a deal doesn’t feel right, it usually isn’t. Real estate is, and always should be, a long term investment.
Regardless of market conditions, there will always be buyers and sellers. That being said, it is never a bad time to do either. Let me explain…

If you are a seller, odds are you are going to be a buyer as well. Since the market is depressed, you will most likely take a hit on the front end, especially if you bought between 2002 and 2007. That being said, when you go to purchase your new home as a buyer, you will be able to make up for most, if not all, of your loss. I have had a handful of clients over the past year that either broke even, or took a loss on the sale of their home; however, they were able to buy a bigger place in a nicer neighborhood then they would have been able to a few years back. If it would have been a hot market, they would have made money on the front end, but paid dearly on the back end. Make sense?

There still continues to be low interest rates, depressed markets and lots of inventory. If you have patience, there are short sales out there that are very good deals and if you have money to invest…this is a great time to build your portfolio.
Hopefully in 2011, the economy will start to recover, people will get back to work and inventory will slowly be absorbed stabilizing pricing and the housing market overall.