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Cash In on the Boom in New Home Sales

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If buying and holding new houses is your strategy for investing in real estate, this could be your lucky day. 

Thousands of new homes are on the market - and they are selling for record low prices. Here's what the Associated Press reported yesterday:

  • 981,000 new homes sold in April. That’s a jump of 16.2 percent over April of last year - the biggest one-month jump in 14 years.  
  • But at the same time, new home prices are tumbling. The median price of a new home fell 11.1 percent between March and April alone. As the AP article explained, “The big price decline indicated that builders are slashing prices in an effort to move a huge overhang of unsold homes.”

The handwriting is on the wall, written with a broad brush. This is a great time to buy a newly constructed home - or a block of them - for a rock-bottom price. But to take advantage of this opportunity, you need two things:

First, financial resources. If you are prequalified for a mortgage or have cash in hand, you will be just the kind of buyer that sellers are looking for. You’ll be able to move fast, negotiate hard for the lowest prices - and leave unprepared buyers far behind.

Second, current knowledge. Actually, the boom the AP reported was just a small tremor in some parts of the country. The strongest sales uptick - 27.8 percent - occurred in the South. But in the Midwest, sales actually dropped by 4 percent. So knowledge is power, and you can’t fly blind.

But if you know how to arrange powerful financing and negotiate deals like a pro, make no mistake about it. These are days of unprecedented opportunity for investors. And if you are simply looking for a nice new house for yourself and your family, now could be a great time to make your move.

Michael Sexton is President of Trump University.

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8 Comments   Post a comment

[-] Posted by u266082 on 05/25/2007 10:29 AM
I am an unprepared buyer and kick myself in the behind for not keep a good credit score and for not wasting money on frivilous depreciable items. Because this is so true about new homes. In my area they are only 100,000 dollars above the price of new homes and about 50% less than the fine homes in L.A. I thought I could have a house as nice as my wealthier relatives and friends for at least $200,000 less; wow, what a thought. I recently walked through a bunch on new models, and I thought "Da_ _, these houses are huge for entertaining: I counted the seating on one floor to be spacious enough with seating arrangements for 32 guests. These new homes have all of the emenities of what a modern house should have like built in surround sound systems for various media, computer coves, intercoms at the front door, home offices, grand room for entertaining, reception (parlor) space in the entries, luxurious bath rooms like those you would have in a retreat. Choise of carpets and painting are designs for the time. Oh my, did I blow it? Maybe not, these home will become availble again for me as used property. But, It would be sweet to start getting equity on these puppies now. Take a tour through them and dream of the possibilites.
[-] Posted by Business 2000 Foundation on 05/25/2007 3:19 PM
That is an interesting article. The economy plays a major factor in the housing affordability market. Bad structure of deals, lending and over housing development just collapsed. Great deals out there if you structure. The strategy: bring cash.

Cash-flow so you can make your loan payments.
[-] Posted by user26105 on 05/26/2007 8:24 AM
Mr Sexton, a glance about: work politics cash in boom home sales and life generally spoken from past sacrifices to the present generation: November83: Banca __of Italy and its Branch in Atlanta begin to funnel $5 billion in unreported loans to Iraq. Iraq, with the blessing and official approval of the US government, purchased computer controlled machine tools, computers, scientific instruments, special alloy steel and aluminum, chemicals, and other industrial goods for Iraq's missile, chemical, biological and nuclear weapons programs. On 21March1986 the United Nations Security Council made a declaration stating that "members are profoundly concerned by the unanimous conclusion of the specialists that chemical weapons on many occasions have been used by Iraqi forces against Iranian troops and the members of the Council strongly condemn this continued use of chemical weapons in clear violation of the Geneva Protocol of 1925 which prohibits the use in war of chemical weapons." The United States was the only member who voted against the issuance of this statement. TOKYO (Reuters) North Korea fired several short-range missiles on Friday, but the United States and its Asian allies said the launches were part of normal military drills and would not affect talks on Pyongyang's nuclear arms program."It appears to be a routine exercise" said Gordon Johndroe, spokesman for the White House National Security Council.Christopher Hill, the top U.S. envoy on the North Korean nuclear issue, said they were "not unusual."."I don't think it will affect the six-party talks," he said of nuclear negotiations among the two Koreas, China, Japan, Russia and the United States. Candid question: to *wash* the effects of 5 billions money and hightech invested like, asking myself why all that assets where not used in the simply Law of God to say, well, Iran Iraq we have listened at both of you but if Iraq need of water resources and for that trowed away 70.000iranian people from they*re homes, we may use that amount of help building a spillway and the most ultra high-tech piping systems and infrastructures and help you with tech for houses in case of an earthquake your people will be safe, our people worked hard for this 5 billions and we help you with that way as long you both will be able to respond in return kindlike to yourself and sustain our nation with what you have and we lack.Globally mirror tell the truth of standard life quality if this hard worked funds we use it for prosperity;what kind of seeds have we*ve planted in the past, fruits of war still powerfull, but as we change the target of that tech funds people involved than globally we may feel some security some go home not fear of bombs work is enough to do in order to provide to the peoples houses life security retirement as travelling, really why not. Look, in front of natural disasters we are helpless and not understand that the people we miss that way are small procent compared to the missed people missed already as war records balance just from 1900till today! GOD and we as mirrors, well, we are naked in front of his eyes, no place to hidden! As our labour on the Earth.the right balance between give and take back.The Planet, Life itself as OUR GIFT and the last Law is the Law of Love of Christ(wrotten word continuity from Scriptures to the Apocalypsa), his sacrifice washed all. Generations live and die…so what we may do for more safety,work, life, love globally? We are all ONE! God creation we try to copy it at fade level, creation breath precise labour and peace in the serenity of silence, if applied globally the son*s of our son*s will know to say: Thank You! and mean it at conscious level difference between war costs and the priceless water! Daniela
[-] Posted by member1598347 on 05/27/2007 8:27 PM
Great article, I'm curios to see how the new lending laws will effect the housing market and economy. I dont think the foreclosures and short sales that are in abundance right now will hang around. Just my two cents!

Logan Chierotti
http://www.coloradohomehelper.com
[-] Posted by user26105 on 05/27/2007 11:46 PM
Globalization creates losers as well as winners, and entails risks as well as opportunities. An International Labor Organization noted in 2005 that the problems lie not in globalization per se but in the deficiencies in its governance. growing divergence, not convergence, in income levels, both between countries and peoples has widened. The rise in unemployment and the accompanying "casualization"of the workforce with more and more people working in the informal sector, have generated an excess supply of labor and depressed real wages. Increasing inequality between rural and urban populations, globaly,could have disastrous consequences in the event of political transition.but millions of people suffer from poverty:Food facts: 852 million people still hungry.Darfur Sudan,no words: www.foragreatercause.org/thepicture.html , and if the 7-th year is specified in Bible as the forgiveness year, if globally the inflation vs poverty may lead at extremes events, what in God*s name may we plann in order to balance war danger like cure the poverty and build at reverse a new world from the weak and form the poor with benefic effects on the whole world if foundation we will finnaly able to set it as by word of God wrotten in the Bible!What will happend with the brave soldiers when back home?health care;have they wifes still waiting on them? Houses safe or foreclosured somehow? Work integration as retourn to they*re primary citizen charakter! From the Rome times army has peack knowledge, so in this grace year of 2007 the history go with us back into the Moses Laws and the blessings for a mountain also oposite blessings for another mountain.Written words:the 10rules and blessings if obey.Shortly, make the peace joining Summit starting from Israel Jerusalem location, as bible said that each and every nation listening at blessings will have it all.Temple Mount location and restauration of the Dom of the Rock shrine and Al Aqsa mosque, as options into a huge transparent Exchange Trade long term investition stocks, imagine, worldwide investing in the PEACE proces for 10 years that*s mean Middle East in once investments in Real Estate but that are conditioned by water and employment and at first security and stability. Sewages, palestinian people in need of help too, neighboors with they*re thissame roots of conflicts…investing in the biggestPeace summit from greens tech applied to the trash colecting from 1 monetary units till 10-th part of investors here, starting with water till the irrigations, one option, residences another, turism as the very special assesment of huge revenues as they accept peace and reconstruction. Soldiers before comeback, ask who like to serve the huge reconstruction projects? Knowledges and discipline they have used in a way that no other big reconstruction will be able to mobilizate such a force applied to the target, and is a sure cure to the after war health effects, high tech maps and plans army has, open communication and joining imagine to name locations and for each one, starting with residences till industry development but at first land work, Palestina Israel Lebanon Syria to the Iran Iraq till Africa building infrastructures at green high tech standards serving people and peace and final target as Meeting in the Tent : Deuteronom30:1,14 Promises; 15,20 THE CHOICE;ch 31:9 to 30 Ch 31 Moses Song for Heavens and Earth for rain and God, chapter 33 the Moses blessings to his 12 sons. The foundation in Stone as word of god for the future milk and honey land as promised to reach forward where is needet, it is so, and establish the market and financial global balance as softly create fair values amortizing the global inflation as scarcity of consumers above 7X than we product;the right balance require Summit of work is enough but at this scale it succeed cherished with bless of the Earth!See it?wonderfull isn*t?Daniela
[-] Posted by member1399493 on 05/31/2007 3:53 AM
Aloha ,just me again a cupple of years ago I bought Lot for 2000.00 on a golf course down south and I always wanted to see if I can build a house with my home equtiy loan and refinance it after and then pull all the cash out and have a break even cash flow and guess what it worked And I did it living in hawaii and the house has 50k in equity so pick the rite area and have some balls good luck toby
[-] Posted by u256186 on 06/01/2007 5:10 PM
I know how hard it is to buy or sell a house if the timing or location is not in your favor.
Check out this online listing service called List4me.com where you can list your home for free (they have a special offer of 10 free listings). And if you are a buyer you can search for a home in your area. Check it out and you won't be disappointed.
[-] Posted by www.BigOLLC.com on 06/06/2007 2:17 PM
Yes, there is no time like now to buy. Interest rates are still at a 40 year low. I remember when I was 7 years old and my parents were paying 7% interest on their mortgage. And I remember when I was paying 12% interest on a mortgage and I thought it was a good deal. And it was. Because I bought and owned Real Estate that appreciated over time. You need to remember that the real estate market is cyclical, just like the stock market, and the economy. You have to learn to ride the waves. Up is good and down is good. There is no bad. So housing prices have declined 10% to 15%. Wow! Lucky you didn’t buy? The best advice from one of my mentors was, "You have to see the Big Picture Dennis". Here is the big picture specific to my area. In 2003 a new 3 bedroom home sold for $129,000.00. The market peaked here in 2005 and that same home sold for $310,000.00. The market appears to have stabilized here and that same home is selling for $290,000.00. So my market had dropped six percent. What have I lost? Nothing, I have gained $161,000.00 in equity. What will I do? Cash out and buy more homes when the foreclosures start to hit the market in the next few months. From my observations real estate goes in 5 and 10 year cycles. Market Peaks, Market Slows, Foreclosures go on market, and then market rises again. Simple rules of supply vs. demand. Population grows! Land doesn’t. Ride the wave.

Cordially,
Mr. Dennis O’Donnell
CEO, Big O, LLC – www.bigollc.com
Vice President, Precision PCB Services, Inc. – www.pcb-repair.com
Owner/Realtor, Lucky U Realty – www.Lucky-U-Realty.com
for Oroville Real Estate
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