As we end another year, I reflect on what we have experienced as investors in 2007 and think, boy the news sounds bad. Did you know that from 2001 to 2006, 6.6% of those employed throughout the United States were in a real estate related field?

2007 has experienced its real estate woes. If you can see past the sub prime crisis and poor housing starts, you will learn the median price of an existing home fell only 2.2% in 2007, according to economists.

What is the forecast for 2008? Or better yet, what should we as investors be doing in 2008? The answer is…it depends!

First, remember to think of all real estate in local terms. More than half the markets in the U.S. have not had a downturn in prices in 2007.

Homeowners who plan on staying put have nothing to worry about. Buyers who are looking for a deal may see this market as the opportunity of a lifetime, and sellers need to get realistic in their expectations.

Let’s face it. If you are in a hurry to sell, expect to take a minimum of a 20% hit on the sale of your property. If you can wait until the panic phase is over, do so.

Use internet sites like Domania (www.domania.com) and Zillow (www.zillow.com) to research current home prices in the area you wish to invest in. They keep fairly current on the market.

Take advantage of your local real estate investors association and get up to date information to help you make informed decisions in your marketplace. Visit www.nreia.org to find an association near you. You might also want to attend the upcoming real estate cruise in February to learn creative strategies to handle your real estate portfolio.

Look at creative financing alternatives to help you close your deals. Seller financing is alive and well. You might even consider getting educated in the private note business. One good source to go to is the NoteWorthy newsletter. www.noteworthyusa.com

Refresh yourself on creative buying techniques such as options, sandwich leases and more. Don’t forget to check with your state government and get the up-to-date regulations to make sure some of these great strategies are legal. I know Texas has laws with regards to lease options.

Don’t forget to use your IRA in the event you need cash to do those creative deals that you may otherwise not have thought of. Visit www.theentrustgroup.com to open a self-directed IRA.

How low can those prices go? I don’t have a crystal ball to predict this; however, my belief after going through three downturns in previous real estate markets and experiencing 18% interest mortgage rates is to have an investment philosophy and follow your gut. In my case, that means hold on!

This entry was posted on Friday, December 28th, 2007 at 8:00 am and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.