According to the S & P Case Shiller composite index home prices continue to rise. The latest data show a 5.5 percent gain in prices from October 2014 to October 2015. That means that as of October 2015 home prices have returned to their 2007 levels in the 20 cities included in the index as can be seen in the chart below.
The real estate boon is and has been on again folks. Real estate is sexy again. And prices are likely to continue rising. There is simply not enough supply for the demand. Even here in Memphis, TN homebuilders are scrambling to get any buildable lot they can get.
If you are on the fence regarding selling any properties, 2016 may be the time for you to hop off onto the sell side. If you can find a good deal, now is the time to consider doing a flip and even buying more rental property. Be careful though. Stick to the fundamentals of cash flow, cash flow, cash flow! Don’t bet on constantly increasing rents and increasing prices. Nothing goes up forever.
Will prices make it back to the 2005/2006 highs? Who knows?
I am interested in what you think or what you see happening in your market. Let me know with your comments.
Here in Palm Beach County, Florida, home prices continue to rise. But rents are, too. Should you buy? Should you sell? Either way, your advice to stick with the fundamentals of cash flow is right on. This strategy doesn’t depend on home values continually going up, which sets it apart from the house-flipping speculation that cost many home buyers dearly when the market collapsed.
George Lambert
Author, What You Must Know BEFORE Becoming a Greedy Landlord. How to build a portfolio of investment properties for an income that lasts a lifetime.