I wonder about this also. I know foreclosures can be a bargain, but with prices so much further to fall, this won’t be a good time to get a foreclosure. Perhaps if you really know what you’re doing, you can still make money on a very good foreclosure despite a declining market.
I’ve requested info from ProFunds Short Real Estate fund, which invests in companies opposite of those held in the Real Estate Index; I wanted to find out what companies they invest in and it’s not in their prospectus, so I’m waiting for them to mail me their annual report.
Of course, if you own a house, you can sell it.
Is there a way to make money on the companies that hold 1st trust deeds? They are offering 12 – 16% APY for investors buying 1st trust deeds, but as their borrowers default, they won’t be able to absorb the losses and they will go under, too. Perhaps some of them are publicly traded and can be shorted. I just read about Residential Capital, Mercury Capital, CA Loan Servicing.
In the meantime, I’m putting the money from the sale of my house into a 4.5% 4month CD. Anything paying a higher rate has a risk of loss of principal, and I didn’t sell my dream house with a magazine worthy kitchen, just to lose it all chasing a higher yield.
Keep us posted, leung_lewis. You are an inquisitive person, and I hope to learn more from you.