The Real Estate Bust Is Here

We have talked about the coming real estate implosion for over a year. If you have read my free report, “Five Things You Must Do Now To Protect Your Investments,” you know that one of the things I recommend is converting your home loan to a fixed rate mortgage. If you haven't read my report, you can get your free copy by sending a blank email to investoralert@freefollowup.com.

The reason it is so important to have a fixed rate loan is because interest rates have been going up for over a year now. Folks who bought expensive houses using interest only loans or adjustable rate mortgages are in for a huge shock. Some of those loans will be adjusted this year and payments in some cases will increase by 40 to 50%.

As a result, a large number of defaults are starting to hit lenders. This will only exaggerate the problem.

According to lenders, we will see a 10-20% tumble in home prices nationwide. In some areas it will be worse. Two out of three lenders say that there is a bubble in the real estate market. Five out of ten lenders say the bust is here now.

The National Association of Realtors now predicts that sales will drop this year for the first time in years.

These groups are people who make their living from a booming real estate market. They are not the ones who you would expect to sound the alarm and yet they are doing that now. I would guess that their estimates are on the optimistic side because of their positions in the industry.

That could mean that things could turn out much worse. You do not want to be on the wrong side of this market. Now is not the time to trade up or purchase speculative property. Now is the time to sit back and wait for bargains.

If you have purchased a home recently that is stretching your budget, it might be a good idea to look at selling your home and putting any profits in the bank. Where would you live? In most areas of the country, the cost of renting is cheaper than ownership right now. (A sure sign of a bubble) Imagine renting for a year and buying back your dream house for 30% or even 40% less than you originally paid for it. It could happen.

Afraid that you might miss out on further appreciation in the market? Well, I have a way for you to play the game without all of the risk. I'll cover that strategy next time so come back soon...