I have watched the housing market for the last 5 years as my friend's home values have gone from overpriced to being cut in half or more! I have seen homebuilder's market values diminish substantially and I am frequently asked, "Is it time to get in?"
I think there are plenty of opportunities in the market for the patient investor, but the real estate market isn't like the stock market, where investors can make money on the way down too!
Unfortunately, even though America was build on "home ownership" we have seemingly forgot that most people buy homes to live in, not solely for investment property. That is the main reason you're seeing a collapse in markets in Florida, Arizona, and California while the NYC, Chicago, and even Atlanta markets are still relatively strong.
There are two things I take solace in:
1. People will always buy homes
2. Population growth will continueÂ
If nothing else, these two factors will ensure that home builders stick around and as long as the average Americans wealth continues to rise, the average American home price should continue to rise as well.
For the time being, I'd like to take a look at two companies in the industry that are still making money… Toll Brothers (TOL, Financial) & NVR Inc. (NVR, Financial)
(Table Here)
Most of the home builders have had similar growth over the past decade and who knows if these two will continue to earn money or have a few negative quarters like many others in the market are going through right now. If any of the homebuilders have even a portion of the growth in the next 10 years as we've seen in the last 10 years, their values will inevitably rise. Of course as certain parts of the country slip into what some say are signs of recession, home builders may take some time to get back to the levels they were years ago. But it does payoff more in the end to be greedy when others are fearful!
*This article does not constitute a buy or sell recommendation from PigsGetRich or myself.
I think there are plenty of opportunities in the market for the patient investor, but the real estate market isn't like the stock market, where investors can make money on the way down too!
Unfortunately, even though America was build on "home ownership" we have seemingly forgot that most people buy homes to live in, not solely for investment property. That is the main reason you're seeing a collapse in markets in Florida, Arizona, and California while the NYC, Chicago, and even Atlanta markets are still relatively strong.
There are two things I take solace in:
1. People will always buy homes
2. Population growth will continueÂ
If nothing else, these two factors will ensure that home builders stick around and as long as the average Americans wealth continues to rise, the average American home price should continue to rise as well.
For the time being, I'd like to take a look at two companies in the industry that are still making money… Toll Brothers (TOL, Financial) & NVR Inc. (NVR, Financial)
(Table Here)
Most of the home builders have had similar growth over the past decade and who knows if these two will continue to earn money or have a few negative quarters like many others in the market are going through right now. If any of the homebuilders have even a portion of the growth in the next 10 years as we've seen in the last 10 years, their values will inevitably rise. Of course as certain parts of the country slip into what some say are signs of recession, home builders may take some time to get back to the levels they were years ago. But it does payoff more in the end to be greedy when others are fearful!
*This article does not constitute a buy or sell recommendation from PigsGetRich or myself.
