Smart money, Dumb investor

I was reading another blog, where a Las Vegas Realtor was writing about the number of buyers and how difficult it is to get offers accepted in the entry level range. I was surprised by the number of "nay-sayers" that were hammering the blog. The following is my addition to the blog...Also, as a heads up, interest rates have jumped dramatically in the last 24 hours, so if you were thinking of locking today, talk to your lender and see if they think things may drop back down after the stimulous package comes out...

What really bothered me was the cynical nature of the posts. I am currently working with 6 buyers right now, one of which is a strict investor, wanting to put a tenant into the home. The rest are people that have been sitting on the sidelines watching the market go down and realizing that real estate is back to being an investment that doesnt move in 6 months. Real estate has historically been a slow growth investment, which is why until recently was a very safe investment. The comments I heard in 05 and 06 about "flipping" have been replaced with "we'll hold on to it for 4 or 5 years then turn it into a rental and move up. Its a different strategy than the get rich quick, instant gratification attitude that contributed greatly to a lot of peoples problems in the market today.

I am currently seeing my buyers put in offers at or above list price and lose the home to buyers putting in offers as high as $50,000 over list for homes. As rental prices rise, which they currently are, people will start to realize they can own for the same price they are renting for, and the elevator will start going back up. Hopefully the loans will be available for the majority of these purchases, but I think the days of being able to get my dog a jumbo loan at 100% are a history!