Light at the End of the Tunnel
By Gustavo Blachman
Aventura, Florida 33180
There's a light at the end of the tunnel, and it's not a train. We're seeing some action in the real estate market, in the form of lots of motivated lookers. There are a few different reasons triggering this new activity.
For investors, real estate is once again looking like a great investment. That diversified portfolio of stocks, bonds and other financial vehicles your financial advisor recommended may not have been so safe after all.
Let's say you trusted 160 years of experience and bought bonds from Lehmann Bros. Then you bought some stock in General Motors and in Sirius Satellite Radio. To further diversify, you added some Wachovia Bank shares. To make it even better, in 2001, assuming the Internet would pick because it's such a great business, you bought mutual funds from Munder Net Net. So you were spread out among cars, bonds, banks and interest-paying CDs - and you've since lost about 98% of your equity. You think, "Maybe investing in real estate isn't such a bad idea. After all, if the mortgage on my house was paid nearly paid up, the most I would have lost would have been 20%-25% of the equity. So maybe this is the time to buy."
The South American market is also picking up. Due to the policies of President Chavez, the value of crude oil in Venezuela has been cut in half. In Argentina, the government is is creating chaos by trying to renationalize the private social security fund. Every other country in South America has its own story - in Bolivia, Evo Morales is a known Chavez protégé, and Rafael Correa in Ecuador is called Chavez's "Golden Boy." As a result, the economies of these countries are facing a great deal of insecurity, and investors are once again looking to the US as a safe haven - especially when our residential real estate prices are such a bargain.
I'm not saying the real estate market is going to rise up and magically repair the US economy. We still need to find the right fix for the financial sector. But if we can just switch our vision from negative to positive, we might see that modest upswing in activity for what it is -- a light at the end of the tunnel.
Keep your faith in our industry.
Gustavo Blachman
Terrabella realty
www.goterrabella.com
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