Ask an expert: Time to invest in housing?

MSN Money's Charley Blaine explains what the latest reports mean and whether it's safe for investors to move back into this sector.

By MSN Money Partner May 7, 2013 9:37AM
Reports on new housing starts topping 1 million in March for the first time since 2008, as well as the latest figures on existing home sales and home prices, are encouraging. The housing market is in the midst of a recovery. So, is it time for investors to jump back in?

In this video, MSN Money's Charley Blaine explains what's behind the reports, whether it's time to start house-hunting and where the smart investment is in a recovering housing market.
The housing bubble burst left many investors cautious about the market. It's no wonder. After peaking in early 2006, housing prices were decimated across the U.S., in some areas by 50% or more.

Home for sale © CorbisThat left many homeowners with negative equity and underwater mortgages they could no longer afford. Foreclosure rates skyrocketed, and families were left homeless.

But now the market is finally improving.

As Blaine explains, even though both new housing starts and existing home sales show that the rebound is gaining traction, we're still just beginning to recover.

However, because we're still in the early stage and the market isn't booming yet, this is the time to go house-hunting.

And for investments? Blaine recommends looking at housing and housing-related stocks such as Home Depot (HD) and La-Z-Boy (LZB), as well as homebuilders' ETFs. But he also warns investors there's a bit of a sell-off right now.

The discussion about the housing market, house-hunting and investing in this sector continues over in MSN Money's Facebook community.

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47Comments
May 7, 2013 1:42PM
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Isn't it a coincidence the housing market is getting better yet the federal reserve is printing fiat currency at a record pace!  Taxes are up, unemployment is virtually unchanged, personnel debt is at an all time high, household income is down yet somehow people have enough credit and money to purchase homes!  It's all being created by investors pushing regular people out of home ownership and also creating another housing bubble!  I still hear of banks pushing ARM loans!  The point is, how can there be solid real growth in the housing market when the basic fundamentals of a good economy are not there!  This article is BS!
May 7, 2013 12:22PM
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If you flip a house in a hot housing market, and make $20,000 in a month, oftentimes without doing anything to the house, you're called a savvy businessman.  But, in many states, if you flip a concert ticket, also with the intent of making a nice price in a short amount of time, you're called a scalper and arrested.  Why is that?
May 7, 2013 1:24PM
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I don't understand a housing comeback when there are more people out of work than ever.  Government jobs numbers are false and as obamacare looms that will even get worse.

Are these stories just too jack us up and make us feel better?

May 7, 2013 1:52PM
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You mean all the bank owned homes (Dang near all the homes trying to be sold) are only being released in groups so all the hard working people with decent jobs and decent credit can play a bidding war with investors and pay double to triple what a house is worth then yes the housing market has come back. Yay greedy people.

May 7, 2013 2:18PM
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The houses for sale in my neighborhood either got bought then immediately put up for rent or the sellers gave up selling and put them up for rent.

 

Either way, I'm glad to see the for sale signs dissapearing. If only they can get the renters to mow their lawn every once in a while.

May 7, 2013 2:12PM
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The Media or Washington can tell you anything they want "you to hear"...whether that information is correct remains to be seen.
May 7, 2013 2:11PM
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There is no Housing Recovery just like there is no Economic Recovery.  It's a Bubble that's been created by massive liquidity being pumped into the market & fueled by speculators who are riding the greed train.  Over 30% of house sales to investors in cash-only deals.  That my friends does not equal recovery.  The best part of the current situation is to be able to take advantage of the lowest interest rates in history if you are in the position to come back into the market.  But the motivation to buy should be based solely on need and not false ambitions to profit big-time as in the past.  Those days are gone. Wait as long as possible tile the end of this year or next year if you are looking to buy, to see where prices are when the housing industry (and the rest of the economy) implodes.
May 7, 2013 2:37PM
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Biggest concern of mine is the property taxes that are assessed on houses.  You can pay off your mortgage, be it 300k, 500k or 1mill.  You still don't own the property, try not paying the taxes. The gov. will seize your house after a period of time. There are however a few states that do not attach taxes to the property.  HOW is it a good investment if you have a yearly fee on something you payed for? I tell renters if you vote for school/fire/police levy's your rent will go up and i get a dumb look and then they say i don't own the house. Can you say public schools. 

Wonder if the banks that are holding all of the foreclosed homes have been paying the property taxes or do they get an exemption from the gov.  Might be a good story for a hungry journalist.
May 7, 2013 2:21PM
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Yes, usually the average folks are late to the party.  It takes research, an understanding of the markets, luck, the right amount of resources, and the right connections to make it big in any market.  For the average folks, the best path is to buy within your means, adhere to location, location, location, patience and hard work-  Time will then lift up your boat when the next wave comes and keep you at the crest.  Many average folks have achieved the American Dream this way.
May 7, 2013 2:07PM
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When investment growth is entirely based on borrowing and debt leverage (it definitely is in real estate), then it's only sustainable as long as the debt and credit is available. In other words, it isn't real.
May 7, 2013 2:12PM
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Subslime is back baby!!! This administration needs some sort of legacy.. Might as well be the blind leading the blind and dumb!!!
May 7, 2013 3:23PM
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With the higher credit/income requirements to get a loan now it's crazy how much money people have to pay to rent a house in my neghborhood that they could buy with a monthly payment of 1/4 to 1/3 the rental price. Assuming a 30 year loan. I know owning a home has a lot of costs and additional responsibilites associated with it and it isn't for everyone but it's crazy that you can buy for $450 /mo but the rent is $1000-1200 /mo. You can repair a lot with that price difference.

May 7, 2013 3:59PM
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Housing Market has not come back. It looks good on paper.  Are we a nation of 'believe everything we read" ? Housing market tanked.  More homes in the market since the real owners either on the street or sleep under bridges.  The new owners have bought homes for 50 to 60% of the value.  Equity lines are gone for ever.  Yes, market is picking up when you pay half the value and trying to sell it for 10% profit the next month. Thanks to TOP 5 Banks and forclosure attorney's, using our own (tax payers) money to write their own agenda (guidelines) until they take over your HOME and life savings!

May 7, 2013 3:52PM
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Of course the housing market is looking better. When it took a nosedive and people were loosing their homes to foreclosure they had to rent. All these people renting (remember the rule of supply and demand). More people renting......prices for rent go up and up. Meanwhile home prices have come down and down. It is probably cheaper now to buy and pay a mortgage then to rent. Is my thinking wrong?
May 7, 2013 3:03PM
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The housing market has come back some, but nobody working in the construction industry is making anything close to what they were before the crash. 

 

Home values haven't come back, and until we kick the illegal's out of here our wages aren't going to come back either.

May 7, 2013 4:16PM
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The same people who were responsible for creating, causing, preventing, and reporting on the worst financial collapse since the Great Depression are at it again. None of the criminal shyster politicians and banksters were arrested, prosecuted, and jailed.  Nothing has changed. They are all still in charge. The game remains the same. 

 

Anybody who jumps back into the housing market this time, deserves everything happens to them. This time is not different. They should know better.

May 7, 2013 4:10PM
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The Banks are holding back about 19 million houses... keeping them off the market and artificially low interest rates are making the housing market look good... guess who is paying for those 19 million houses just sitting collecting mold... you guess it, the US taxpayer... things are not good... 
May 7, 2013 4:03PM
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"Has the Housing Market Finally Come Back?"

 

If you have to ask, then it probably has NOT.

May 7, 2013 4:54PM
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The time to invest in a rental house has been the last three years when the media was telling you not to do it. Now that inventory is in the tank, and prices have gone up over 10% in some areas, they tell you to jump in. Taking financial advice from MSN is a sure-fire way to end up in the poor house.
May 7, 2013 3:40PM
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Those who waited for the bottom to hit before buying waited too long. We wont see prices as low as 2 years ago for about another 15 years. You outsmarted yourself.

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