Buy Foreclosures Now?

CNN says buy foreclosed residential properties now, before it's too late. I can see where this might be true in Rust Belt hellholes, like Detroit or Cleveland. The prices there have reached very low levels, even for luxury homes in exclusive neighborhoods. Cities like these though, have been net population losers and economically, nothing is going on. Even some areas of California, notably the San Joaquin Valley of Central and Inland Empire of Southern California, might be good deals, if you have a real reason to live there, but not many people do. Commutes are long and expensive.

In my area of Coastal SoCal, Minimum bids for good properties are still too high and often receive no bids. The banks would still rather hold on to properties than accept what the market will bear. Commercial real estate still hasn't crashed too hard. I think that's still to come. There are a lot of near derelict strip malls and shop rental rates are dramatically decreasing, as owners strive to keep tenants at any cost. Rental housing has not gone down in cost at all but I'm seeing a lot of for rent signs and in this town that's very unusual. In anticipation of an endless 10% a year rent hike, many apartment buildings have previously sold at vastly inflated prices that cannot possibly support profitable ownership anytime in the foreseeable future.

If I was going to invest in real estate, I would still wait, perhaps for a further meltdown in the commercial property sector. Maybe an older 8-12 unit apartment, on a relatively large piece of ground, that could be rehabbed, with an eye to eventual tear down and replacement by more units with a higher rise and underground parking in a more prosperous time, many years from now. The other possibility would be a strip mall that could be converted to a small, ethnic, mercantile center, South Asian or Middle Eastern. These populations are rising in this area and they have to drive far currently, to do their special needs shopping.

In any case, I'm very leery about the economy. I do not think that we are in a sustainable recovery or heading toward one. I think that the stock market is in a bear market rally that will likely end by Fall. If the Government continues to issue debt and print money at the current rate, an economic firestorm could ensue. If that is the case, real estate would be a great investment but not until afterwards and you'd need to buy with something other than dollars.

What's it like where you live? Where is that? Would you buy a foreclosure now?