Foreclosure.com Founder, President and CEO, Brad Geisen, recently shared some expert thoughts on the hot-button issue with the New York Times Freakonomics blog:
“When property values are cheap enough that they equal rental values. What I mean by that is when you can buy a property with very little money down and finance it at a good rate, and then rent it out for just enough to cover the mortgage, insurance, and taxes, then you’ve hit what I call ‘economic value.’ That’s when the property value is the same as its economic value. That’s pretty close to bottom. Now, when you have a pendulum swinging, and values are still dropping a bit, it may swing a little past that. If the property was already 30 percent less than market value, and property values are still dropping, and it gets down to economic value, then that’s when the pendulum will begin to stop and begin to swing the other way.”
To check out the entire high-profile question and answer session click here. It’s a must-read “power session.”
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