It seems a good time to invest in real estate market if you have enough cash. The housing affordability index continues to soar and it is now at a record level beating the highest index set during the last two years.
Home buyers are not likely to take the advantage of this opportunity as credit conditions are too tight for many of them. Cash-rich investors, on the other hand, see an opportunity in this and their percentage in buying these low-priced homes is found to be increasing in many markets.
A report by the National Association of Home Builders (NAHB) and Wells Fargo Housing Opportunity Index (HOI) has reveled that about 74 percent of the homes sold during the fourth quarter of 2010 were in the low-price range, suitable to families with national median income of $64,400.
This is more than the number recorded for the first quarter of 2009. More importantly, the percentage has consistently been rising during the eight quarters falling between these and it has always been over 70 percent.
The markets where the affordability level is the highest include the Indianapolis-Carmel, Youngstown-Warren-Boardman, Syracuse, Warren-Troy-Farmington Hills, Detroit-Livonia-Dearborn, Elkhart-Goshen, Lansing-East Lansing and Bay City, Kokomo and Mansfield.
However, there are areas where affordability still poses a serious question. These markets include New-York-White Plains-Wayne, San Francisco-San Mateo-Redwood City, Los Angeles-Long Beach-Glendale, Santa Ana-Anaheim-Irvine and Honolulu.
These low priced-properties are alluring investors to turn to the real estate investment again while families devoid of hard cash are finding it tough to buy homes even if they can afford these. The credit requirements are too tight to help them take the benefit of falling housing prices. Even FHA has tightened the rules governing the loan programs it insures.