Dear Nesters,
My crystal ball has been foreclosed, so if you’re looking for a
prediction as to when prices will begin to climb again, I can’t help
you. But I honestly believe this is a great time to buy, or at least
to get in the game. Let’s look at it from two perspectives:
The Investor. Of course every investor wants to buy at the
bottom; but any seasoned investor will tell you that’s nearly
impossible, and any successful long-term investor will tell you that
trying to time the market is a bad idea, likely to result in poorer
investment choices over the long run.
I’m going to climb out on a limb here and predict
that prices are probably near the bottom in our part of the Metro. I
base my optimism on three factors: (1) rents are increasing as prices
have fallen, making real estate more desirable to investors; (2)
interest rates will continue to be held down by a Federal Bank more
afraid of recession than inflation (particularly in this election
year), again making real estate all the more desirable to homebuyers
and investors; and (3) our neighborhood prices have fallen only
slightly the past two years, and further decline before turnaround is
likely to be minimal.
So, for the sake of discussion, let’s say that we are somewhere near
the bottom, but that we haven’t actually reached it yet. A long-term
investor may well look at this as a very favorable buying opportunity.
He or she has a chance to sift very slowly and carefully through a
marketplace chock-full of variously valued properties—in this
circumstance, do you doubt |
the savvy investor can find a
property that’s, say, 5 percent more valuable than
the norm? And considering the upside potential of
doubling value every 6-10 years (with leverage
increasing return on investment by 1000% or more),
the investor with a long view knows that, for all
practical purposes, this is the bottom.
The Nester. (That’s you,
Nesters). Just as buying pressure from investors
had a lot to do with the rapid price rises earlier
this decade, their return to the marketplace may
help get the engine chugging again. Please
remember, all the advantages I’ve described for
the landlord-investor in today’s market also apply
to you. One thing is certain: it’s a lot easier
buying on this side of the bottom—with more
choices, with complete home inspections, sellers
willing to make repairs, fewer multiple-offer
situations. Plus, here’s your best chance to buy
near friends you have, or friends you want to
make; to hand-pick a home you can be proud of in
the years to come, long after we’ve all forgotten
this market, top to bottom. Honestly, that’s what
I think. Good luck!
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Pat
Rosaves is broker/owner of River Realty.
She has over 30 years experience helping
people with their real estate needs.
Questions may be sent to her at River
Realty, 2543 38th Ave S. Minneapolis, MN
55406. She can also be reached at
612-724-1314, or at www.riverrealty.net |
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