Are you missing out your chance on making the most out of real estate?

Aug. 11, 2013 - PRLog -- Just about 2 years ago, Warren Buffett told to CNBC that he would be investing in a couple hundred thousand family home if they were profitable. But now the national housing market has become costlier and some even label the current median price of single family homes as OVERPRICED.

Cheap mortgages are readily available and those who are looking forward to buying homes to live in would do great; but those who are buying them as investment properties need to be more careful because of the changing housing market.

Houses used to be quite inexpensive in the early 2012 and some home experts also divided the prices of the homes by rent. The price to rent ratio is similar to price/earnings ratio that is used frequently in the evaluation process of stocks.

In 2011, the price/rent ratio was around 20 and the homes were the cheapest then since 1987. The housing narratives have changed since then and the money managers have launched private equity funds and trusts for real estate investment that are designed to hog up the homes and rent them out. The real estate agents therefore still complain of wars for houses in some areas.

The latest month for which the data are available is the May of 2013. The S&P/Case-Shiller 20 city index showed an increase in home value by 12%. The prices of homes in two of the metro areas Denver and Dallas failed to meet the al estate boom.

The national ratio of price/rent in the US according to the data obtained in the month of June shows that it is at around 22.8, which is greater than the average of long term which is around 21. However, this doesn’t imply that home prices will start to drop. The real estate market is most of the time on the rise and the prices gradually start to rise as the owners start sharing their stories of massive gains. However more experienced investors will need to shell out more money as the prices of houses tend rise.

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