Real Estate Recovery Revealed!
(PR Buzzer) - There have been tentative statements made recently regarding the fact that the real estate market is beginning to recover. It is not said in so many words but there are clear signs that the market is starting to improve. Morgan Stanley used a neutral statement saying that U.S. Commercial real estate problems look manageable and that they expect a "multi-staged" and "gradual" recovery.
This is a positive sign, especially for the residential real estate market. Many believe that a contracting commercial real estate market also means that the residential market will suffer in a similar fashion. The latter is not accurate, however, because the commercial real estate market was affected after the residential market. These contractions or booms are in fact just a reflection of the state of the economy and the residential market is the first "mirror" in the chain.
Home prices will always increase or decrease before commercial properties because it is directly affected by the consumer's paycheck and the ability to pay off their mortgage every month. This creates a snowball effect which takes time to reach the commercial real estate market because sales begin to drop but companies are still able to rely on past earnings for a short period before they begin contracting or their cash flow becomes negative and they cannot pay off their loans.
"The home market is always the first to be affected but also the first to recover. Even if people cannot pay their mortgage they still need to eat and cover their basic needs meaning that a minimum amount of cash is still being pumped back into the economy which keeps businesses afloat for a while longer before they are hit as hard. By the time commercial real estate begins to flounder, usually the residential market has already reached a bottom or is very close to it. On the flip side, when the commercial residential market is showing signs of stability and even recovery, however small it may be, a closer look at the residential market will often show small signs of growth," states Gregg Camp, an experienced Santa Cruz realtor.
As an example, the Santa Cruz sentinel published an article in December, 2009, showing that homes were selling at a higher price than the same period the year before. It seems that the bottom was hit sometime in November, 2008 when a home would sell for around $440,000 compared to approximately $700,000 during the years before throughout the boom. However, the same home was sold for $550,000 in November of 2009, which is still no where near the values of a booming market but is still almost a 25% increase in the value of the property.
"This doesn't mean that we won't be seeing foreclosures anymore, as there are plenty in Santa Cruz and all over California but these foreclosures are more to do with badly structured mortgages and people purchasing more property than they can afford which will lead to a foreclosure in any market, whether a recession or a booming economy. The increase in value of residential properties shows that people have greater faith in the future and are either earning more or, at the very least, are no longer worried about losing their jobs. This will lead to a recovery in the commercial real estate market as well because it means that consumers are beginning to spend and put money back into the economy, which is always a precursor to economic recovery," Gregg Camp continued.
The California real estate market was one of the most affected in the U.S. but the higher number of successful sales is a positive sign that life does go on. Of course, this is the perfect moment to invest as properties are still no where near their full potential value and a savvy investor could see a 25% return in as little as one year. However, before investing or purchasing a property consulting an experienced realtor is mandatory as they live and breathe the market and can offer valuable insight into which areas will provide the best return. If you are interested in investing in the Monterey Bay region, from Santa Cruz to Carmel, Pebble Beach, Monterey and Big Sur, Gregg Camp's expertise and experience in the area will be an invaluable asset to you.
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CaCoastalhome.com, run by Gregg Camp, is the perfect tool to help you locate the perfect property or to sell your Monterey Bay home as it has a great "homes for sale" section providing important information on not only the property but also the surrounding area including distance to schools, hospitals and stores. Sellers have the advantage of the "featured property" area to showcase their home.
As a buyer, CaCoastalhome.com allows you set multiple searches which can be saved and forwarded to your email so you will always be up-to-date with new listings so that you can find the property of your dreams. With links provided to local communities the site allows you to get to know the area from people who already live there, which is invaluable, especially if you intend to relocate.
CaCoastalhome.com is designed to help buyers and sellers make the most of their transactions and will make buying or selling a home a walk in the park.
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