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Strategies & Market Trends : Real Estate home/investment -- Ignore unavailable to you. Want to Upgrade?

To: Amit N. Sangani who wrote (24)	7/26/1999 7:10:00 PM
From: David Jones	Read Replies (1) \| Respond to of 73

Greetings Amit: Sorry to say I don't consider myself a sage at all. Just a long term investor in real estate. You asked a couple of very open ended questions. Do I think real estate {homes} prices will go up? Let me tell you this. In 88 I finished putting together a small three house development. I papered it and sold it in 89. A developer built three homes on the site and sold them for about 530k each. By mid 90 you couldn't sell these three houses at all. The 500k market just went away. The next sale of one of these homes went for 480k in I believe 94. Plus the first owner put in several thousand in landscaping. That same house sold at the start of 98 for 620k, making that buyer look like a genius. Like stocks you have to have the holding power to see returns. So yes in the long term it has proven to me over and over that real estate value, in general will continue to go up. Second question is no, I'm sorry to say I don't have a site that gives me any charting abilities with real estate. This is how I research though. You can get a pretty good idea of which way prices will go by looking at the population figures and projected figures. By watching for increases or decreases of population you can get an idea of where things are headed. This works but you have to understand the reason for these migrations in the population. You wouldn't want to buy in an area just because there is an influx of buying but you do what to look closely at it and determine why. For instance the fastest growing city I believe here in Northern Ca. is Brentwood. An hour and fifteen minutes north of you with out heavy traffic. A nice city, still lots of agriculture around it, close to the delta for good recreation, new schools "because of the influx of people" and relatively close to the job market considering many people accept an hour, two hour or more commutes now. For my money I'd consider an investment there but not in a new home. There's too much open land and the home you buy today will be build next year on the land down the road for the same costs leaving you with a limited equity growth. That's not to say equity isn't being seen it's just neighboring Contra Costa is building as fast as possible which dilutes the market. Buying older property closer in to the downtown is where I would look and I have looked. "I was considering buying there a couple years ago but didn't have the holding power to buy undeveloped land and nothing was available in the downtown area that gave me the itch." How should you wait to buy or buy now? That is an easy question if I had to ask myself because I know my particular market and know a good price when I see it. But one has to know one's area cold before one can move confidently. You need to look at a lot of property. I lived here in Pleasanton for better than thirty years and still drive through areas looking for 'For sale" signs. If I see something interesting or if I just want an update I call my broker and get the info. I've spent hours and hours just driving around looking at property. Even when I'm out of town I drive areas and look, picking up the local paper or trade paper comparing prices and talking to locals. This turned me on to Placerville in the Sierra foothills. A nice aggressive growth area feeding off Sacramento's job market and retirees influx. So look at it the new and the old properties. Get a feeling for the housing prices and the rental values. Don't pass up something unconventional like a duplex or living space above retail or a home with zoning for a back door move as I call it. Pre qualify, get a BROKER you feel you can trust. And this may help? Get to know the buildable lot prices. They give you a good idea of what your paying in construction costs. And what your really buying which is the dirt. O' and by the way you can ride a train now to SJ from the valley. Have you checked it out? Dave "land it's the one thing they're not making any more of"-My grand pa.