What Does The "Smart Money" Think Of U.S. Real Estate?

According to today's Wall Street Journal, many of the biggest name investors are ready to buy pools of foreclosed properties when Fannie and Freddie and the major banks make them available. http://online.wsj.com/article/SB10001424052702303863404577285791317719200.html?mod=googlenews_wsj

But there is more. My son Kyle has been a very successful real estate investor, syndicator and property manager over the last 15 years, and has a remarkable track record for accurately predicting the real estate marketplace. Here is a portion of what he wrote to his investors on February 29, 2012 in "BIANNUAL LETTER - BOTTOM OF THE HOUSING ABYSS IN SIGHT?"

"It appears through some recent press releases that both Fannie Mae and Freddie Mac will be selling pools of foreclosed homes to investors. As part of this "REO to Rental" pilot initiative, there will be an agreement with the purchaser that the home will be rented and not flipped immediately.

"Two things will clearly occur if this program is implemented by the agencies along with large banks:
1) The glut of homes will be cleared which will essentially bring us to the bottom of the abyss.
2) There will be more rental opportunities for our residents [renters].

"As apartment owners, we can look at this situation and get frustrated that the agencies are by default creating competition for us through their mandate to hold the purchases as rentals. I see it in a more positive light, given that these new owners will create jobs as they fix up and manage the properties. While the pricing of homes may decline from their current levels, I'm confident that we'll find a bottom as the foreclosure wave works its way through the system."

These are my son Kyle's opinions. This is what some of the "smart money" thinks will happen to the U.S. real estate market. If you are considering buying a home, please consult with your local real estate professional, but this could be a very good time to buy, especially if you can qualify for a 30 year fixed rate mortgage in the 4% range and you plan to stay for an extended period of time.

Dick