Article written by Real Time Investments

Figures last month showed that the price of a residential home In the US rose by 12.2% on average from a year ago- a rate
of growth not seen since early 2006. But what is causing this
rise and, more importantly, is it sustainable from an investor’s
point of view?

The first thing to remember is that the mortgage crisis hit the
American market harder than any other. From 2006-2012
home prices plummeted due to the flooding of the market
with repossessed homes and the unavailability of mortgage
credit. So, although recent gains appear to be reaching bubble
territory, prices are rising from the deepest of troughs and are
still more than 20% off peak levels (figures from the Case-
Shiller Housing Index).

Prices are being supported by improving economic figures,
which are increasing the confidence of both buyers and mortgage
lenders. The other key driver is low inventory. Constructors
who took a battering from 2007-2012 are now
playing catch-up as demand for new homes vastly outstrips
supply. Low inventory levels looks set to put upwards pressure
on house prices for the foreseeable future.

It Will Rise From The Ashes…

Some of the areas that suffered the most 6 years ago are now
poised for particularly strong periods of growth. Michigan is
perhaps the best example. Its capital, Detroit, has long been
the stereotype of urban decay and after the financial crisis had
the lowest average house price of any large metro in the US.
However, tides are changing. In 2011 and 2012 Michigan reported
two years of house price gains of between 5-10%,
making it one of the best performing markets in the US. More
exciting from an investment perspective is that property prices
still remain 33.3% from their 2005 peaks. There is a lot of upside
here, especially considering the local economy’s capacity
to surpass its 2005 levels.

Michigan is witnessing the rejuvenation of its core manufacturing
industries as well as a diversification into other areas of
commerce. The automotive industry is underpinning the US
recovery, and Detroit, as its centre, is seeing the benefits.

Ford, Chrysler and General Motors recently reported a combined
increase in market share for the first time in 20 years,
as their sales rose in June by 13%, 8% and 6%, respectively.
Carmakers are also ramping up their investment in technology,
with General Motors set to quadruple the size of its software
development department. This is because 2014 model-year
vehicles will be equipped with a platform for hosting an array
of apps- like those available for smartphones. This means new
jobs for highly skilled people in the auto industry and the transferable
benefit of local expertise for aspiring tech start-ups.

Right Market; Right Time

At Real Time Investments we believe there is great potential
for the continued growth of Michigan’s residential property
market.

We provide turnkey property investments; houses that are
tenanted and cash flowing from day one. Our clients can expect
annual net yields of approximately 14% from each property
they own.

We deliver this by acquiring, refurbishing and managing
houses in Michigan. Our objective is for investors to receive
consistently high returns from tangible assets- something that
is not achieved by many in today’s markets.

Investment in a rising housing market with a simultaneous
element of income presents a rare opportunity.

If you would like further information about our company
or investment proposal visit www.realtimeinvest.com/portfolio