Buy and Hold in this market? Well, it appears we're headed for a housing shortage…do it

Buy and Hold (waiting for the coming Housing Shortage) – The oldest, most tried and true method of real estate investing takes advantage of inflation, market appreciation and amortization. Fancy words for, if you hold it…wealth will come. But not all property in 2010 will be a good choice for this strategy.

Experts say we are churning through enough inventory to leave us in a Housing Shortage in the near term, yes thats right builders, a shortage of housing in 2 years. The U.S is simply not building enough homes to keep up with natural demand. Just 672,000 new homes were started in April , an annualized rate and less than half the long-term run rate needed to meet the nation’s natural population growth.

Historically, homebuilders have reacted quickly to meet surges in demand for new homes during times of economic recovery. But certain factors are preventing them from being able to jump back into the New Construction game. The largest is the difficulty getting loans, according to Jerry Howard, CEO of the National Association of Home Builders (NAHB).

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