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Real Estate Growth: How Long Will It Last?
There has been speculation in the media recently about the fact that real estate will begin to fail and implode as it can only handle so much growth. In my humble opinion these theories don't hold a lot of merit and here is why. First, understand that there are three basic things that undercut the validity of saying that there is a real estate bubble that people are operating in. 1. There is no "international" or "national" real estate market. 2. The real estate market doesn't explode or crash. 3. The market has limited impact on the seasoned investor. The Real Estate "Market" is an overall view of micro markets nation wide. When people talk about real estate economics they are usually referring to national or international statistics which in truth are made up of thousands on micro or local real estate markets. So even though you might find a North America wide trend there are still many, many markets which will be completely at odds with the overall numbers. Real Estate Markets do not "Crash." We all remember October 19, 1987, known as "Black Monday." The stock market lost 22% of its value in one day - what investors call a "crash." History points to times which real estate values have taken 22% hits in certain cities and in pockets within cities. However, no real estate market dropped 22% in one day, one week or even one month. In fact, the real estate "crash" of the late 1980's took several years to bottom out in most markets. Keep in mind too the overall performance of the real estate market you are investing in. Those of you who have been active in the Edmonton market the last few years might think that the market is in a slump or downslide, when in reality the numbers they are recording are far above what the average of the last decade show. The market has limited impact on the seasoned investor. No matter if you are holding properties long term or doing a quick flip, the local market changes will not affect you in a major way if you are careful. For example if you are doing long term hold revenue properties there is little to no chance that the market will not increase over the term of your holding period. If you are on the other hand flipping properties then you will buy at a higher price in a strong market and will move the property quickly, or get a better price which will help you in higher holding costs in a softer market. Now, just as a side note for those of you looking at holding properties for future value considerations. If you are buying negative cash flow properties with the expectation of equity increase over 2-3 years then, in the words of a recent article that I read, SHAME ON YOU! If you are using investor's capital to close these deals and the value doesn't increase what are you going to do? What if the value decreases in that time? You are putting investor's capital at risk and as far as I am concerned are acting as an irresponsible speculator, not a seasoned real estate investor! Steele Tolman teaches people how to successfully invest in real estate through the "Zero Down In Canada Real Estate Investing Home Study Course," web mentoring and seminars. http://www.motivagroup.com
MORE RESOURCES: Real estate agents are fleeing the field. Is that good for homebuyers? The Washington Post Houses painted black are trending in the Hamptons New York Post Denmark Made Home Buying Easier. America Should Follow Its Lead. Business Insider WA real estate service will not join national antitrust settlement The Seattle Times Better Investment: Stocks or Real Estate? The Motley Fool Real Estate Transactions, May 27 edition Hopkinton Independent Blackstone Real Estate Sells Turtle Bay Resort Yahoo Finance Village Properties Launches Commercial Real Estate Division Santa Barbara Independent Hamptons Real Estate Market Data - Week of 5/21/2024 Hamptons.com United States - Real Estate - 2024/2025 Australian Federal Budget: Real Estate Key Takeaways Mondaq News Alerts SoCal Real Estate Job Numbers Lag Yearly Averages Commercial Observer US real estate company Prologis lines up CLO successor The Global Legal Post REAL ESTATE | Auto Safety Center adds third location washingtoncountyinsider.com Is Providence massively under-assessing its luxury real estate? The Providence Journal Chatham County real estate: An affordability crisis for new homebuyers Chatham Journal Weekly Real Estate Transactions Jones County News SRS Real Estate Partners completes $4.22M ground lease sale of Chick-fil-A property in Queen Creek Queen Creek Sun Times CEO of Realty of Chicago Steps Down to Launch New Real Estate Venture in September - Markets Insider Slow US housing market has real estate agents leaving the field in droves Greater Baton Rouge Business Report Top residential real estate sales for May 13-17 in Longboat, Lido, St. Armands, Bird Key Your Observer From humble beginnings to real estate titan: Bianca D'Alessio's unwavering commitment and vision Atlanta Small Business Network FIU Chaplin School of Hospitality & Tourism Management establishes new real estate executive advisory board Hospitality Net Grand County real estate transactions, May 19-25 Sky-Hi News Alexandria Real Estate Equities, Inc. (NYSE:ARE) Shares Bought by PNC Financial Services Group Inc. Defense World REAL ESTATE: Asheghian Los Angeles Business Journal Jump Financial LLC Acquires 900 Shares of Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) Defense World Automotive Properties Real Estate Investment Trust (OTCMKTS:APPTF) Short Interest Down 37.5% in May Defense World Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) Receives Consensus Rating of “Reduce” from Analysts Defense World UNR floats real estate deals amid budget crisis This Is Reno Netflix's new real estate show airs amid luxury market slowdown The Seattle Times Real estate licensing program for TN high school seniors WATN - Local 24 Boston's Downtown Real Estate Is Collapsing. This Is Ominous. Boston magazine Roanoke County approves annual budget Roanoke Times Pinellas Beaches Real Estate May 17-24 The Gabber Newspaper May 17-24 Gulfport Real Estate Sales The Gabber Newspaper Schroder Real Estate Invest (LON:SREI) Stock Price Passes Below 200 Day Moving Average of $43.89 Defense World Newland Real Estate Sells Multiple Parcels of Vacant Land in Bonney Lake for $20.6MM The Registry Seattle PROFILEconnect Summer Real Estate Bespoke Networking Happy Hour & Dinner at La Martola PROFILE Miami Blocksquare hits $100M in tokenized real estate with launch of Oceanpoint v0.5 By Investing.com Investing.com AZ Big Spotlight: VanTrust Real Estate, Gottlieb Law, Land Advisors Organization - Arizona Big Media DWS appoints Matthias Naumann as first APAC real estate CIO Pensions & Investments Haring Realty welcomes Luke Tucker as new real estate salesman Richland Source Charles Schwab Investment Management Inc. Has $14.12 Million Position in Anywhere Real Estate Inc. (NYSE:HOUS) Defense World This Tampa Bay chapel houseboat is for sale Tampa Bay Times Ultra-Luxury Real Estate Fort Myers Florida Weekly Commercial real-estate financing tool bill clears NC Senate step Winston-Salem Journal REAL ESTATE | Soup Korner in Hartford, WI changes hands washingtoncountyinsider.com China needs to look beyond real estate for sources of growth Financial Times Real estate insiders: Here's where the opportunities are in South Florida The Business Journals Sarasota real estate firm promotes new office, AI at annual meeting Business Observer Celebrity Real Estate Roundup: Joe Jonas Buys in Brooklyn, Sarah Silverman Scoops Up the House Next Door, and ... Yahoo News UK Housing Market Cooling Faster Than Expected? Trends & Predictions Norada Real Estate Investments Philadelphia-area home investors see largest returns in U.S. over the past year The Business Journals Selig portfolio risks 'imminent default' after missing $239 million debt deadline The Business Journals |
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