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Non-Tech : Investing in Real Estate - Creative Opportunities
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To: John Vosilla who wrote (2513)11/26/2015 11:57:56 AM
From: Riskmgmt  Read Replies (1) of 2722
 
Expecting this to continue for at least another 2-3 years. Very bullish shorter term but very, very bearish longer term 5+ years. What are you expecting?

Hi John,

I adhere to the maxim "All Real Estate is Local" and "Prediction is very difficult, especially if it's about the future" so I am probably the last one to ask. :-)
My focus is on the local market and acquiring or providing financing for under-valued properties and business has never been better! So with all those caveats in place I'll give you my best guess.

Housing world wide has its peaks and troughs but in most developed countries it is never too extreme. What happened in the USA leading up to the 2006 peak was an anomaly caused by the lowering of loan standards to never seen before 100+ per cent financing. The price peak was extreme, as was the subsequent trough and the US market as a whole has not fully recovered from that yet imho. Other developed countries never had the extremes that we did here and so the housing in those countries, especially English speaking ones, are considered a safe and stable place to invest.
As you point out, some places in the US are close to the highs again but by and large they are either big gateway cities or stable areas they never got to infected with the refi craze that swept through the places with more transient populations, Florida, Arizonia, California etc. If you lived in a stable area, never refinanced then you may not worry that the property may have fallen in market value vis-a-vis someone who owes $100k more than the house would sell for and might loose his/her job. Gateway cities got the attention of a lot of foreign money seeking a foothold in what many in the world consider one of the safest places to invest.

I'd say in retrospect the 2006-2011 trough will be seen as the biggest property buying opportunity of a life time. Going forward much depends on the normalising of the mortgage market. The banks are restricted in their lending at present. When mortgages are widely available at the lower rates to more people things will heat up. My hope and best guess is that lessons have been learned and that the powers that be will try to smooth out the housing cycle in the US so it doesn't experience the extreme boom bust cycles of 2006. So I'd say I am bullish on housing next 5+ years with stated caveats. And if you know your local market and follow simple common sense rules, housing and real estate investments can be among the safest and highest yielding investments for the long term. Certainly worked for me.

R.
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