Recently, reports have confirmed that California foreclosures shot up 19% in the 3rd quarter as compared to the 2nd quarter. These numbers do not appear to be subsiding no matter how much or what is doing to help the housing market.
Ed Butowsky explains that you make your money when you buy in real estate. While many are not buying yet, they are ready to do so. Ed explains and agrees that many of his investors feel the worst has yet to come. Furthermore, Ed believes that real estate values are going to drop further.
How does this market recover? Ed relates this stage of the real estate market to riding a dead horse, when it’s not working get off. When the recovery options this administration has provided have not shown signs of improvement its time to stop and look at other options. Those options include lowering taxes or more jobs to help stimulate this real estate market.
Ed believes in a free market, and that the real estate market should be allowed to bottom out on its own and recover accordingly. While no one can predict where and when the bottom will hit, you have to assess the probability. Ed explains that investing, whether its in the stock market or real estate, is a game of probability. Certain areas in the US are surely still on their way down. The recent statistics released about California foreclosures up 19% since last quarter is an indication that the potential for further decrease in value is there.
Switching topics to a recent headline about New Jersey Gov. Chris Christie pulling the plug on the commuter tunnel link to New York siting simply that the state cannot afford to spend the money. While the US government is communicating to the state that they will carry the burden of any budget overruns Gov. Christie is reportedly going to stay his ground. Current estimates for the commuter tunnel project are estimated upwards of 12.7 Billion. Ed expresses his liking of Gov Christie and further likes that he is standing his ground on this. Ed further points out that projects like this rarely if ever come in on time and within budget – take a look at the Boston commuter line billions more and many years later.