Foreclosure rates hit a record high and this market is rallying - are people blind or just crazy?

alanj answered one year ago …

Neither. I actually think it's pretty smart (for those who can afford to purchase or qualify for a mortgage). Think about it. If you are an investor and you purchase one of those foreclosed homes at 35 or 40% below market value you flip it at say 20% below market value you've make a nice quick profit. If it doesn't sell right away, rent it out. The rent on the property should pay for any mortgage on a deep discounted property. The only drawback I see, is if rents come down to the point where it no longer will pay for the monthly mortgage payment or property values decrease 35 to 40% just to break even. And I don't see that happening. Not an investor. Well people have to live somewhere. And if it's not under a bridge or at home with Mom and Dad, or you already own your own home you are probably renting somewhere. With rents about the same as a mortgage payment on the previously described property why wouldn't you consider buying now with property values down. Is this the bottom of the real estate market? Most likely not.But, no one knows where the bottom will end up being. With the typical adult life span of 60 to 80 years property values are always higher within any 60 to 80 years time frame throughout history. If your looking to buy property to live in it really doesn't make that much difference when ( although now presents a good opportunity with home prices the way they are) because over one's life span it will result in a good investment. You might be thinking- What if property values keep going down? So. All property values will be declining in your area. But over the long term property values will increase over one's life span. One other reason to buy, really at any time, is instead of paying someone else to live in their property with no financial benefit you would be in effect paying yourself to life in your own property, which will increase in value over time. So yes it does make since to buy property at any time, but especially now. ( Note: I'm not an investor or a realtor. And I'm not trying to sell any property. So, I'm not trying to talk up property sales.)