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It was one of those years that we will never forget in Real Estate. Instability and unpredictable are some of the best words to describe the market with major price fluctuations in all areas of investment.
Fear in the marketplace was the largest driving force that caused panic with the doom and gloom that was portrayed constantly through the media. Negative media is like gasoline to a fire, just like the positive media that drove prices up in 2006/2007. It's amusing how short memories are as markets were similar in the early 80's and the mid 90's. If we stroll back in history over the last 50 years it shows that Real Estate prices double every 10 years. The question is always the same "will it happen again?"
The fact is that with every major price drop a huge opportunity exists. Most people know that the secret to investment success lies in long term planning, which takes away the emotion that drives us all crazy. What that means is that patience always prevails, those who have planned well and understand what marketplaces do (go up and down in an upward motion) will always succeed greatly.
Real Estate is still and will always be the best and most secure investment you can make. The sheer ability to leverage your money with the bank makes all other investments pale in comparison. Here's an example: Even in the price reductions that have happened in the last year and a half, if you bought a home 10 years ago you would have paid $114,586 for an average home in Edmonton, today the average is $332,853. If you invested 25% down or $29,000 with a mortgage balance reducing over 10 years, your equity would be an amazing $268,349, just do the math on that annual return. On top of that the flexibility of what you can do at this point, such as re-mortgage, rent, renovate, or sell makes your investment even more tantalizing. Better yet there's no reason to increase investing of your hard earned money, just utilizing what you have made on your initial investment allows you to reinvest or just have some fun and adventure.
Should you invest in Real Estate? That's up to you facts need to be your driving force to making your decision. If you do here are a few things to keep in mind.
•1. Follow the baby boomers, buy what they buy, they drive the market always! Recreational and retirement locations will be very busy over the next 10 years, such as, Vancouver Island and other upcoming BC locations, Phoenix, Florida, Las Vegas, California, and Mexico will all do well. The nice part is these are all great places to vacation as well.
•2. Where all the employment is also indicates a huge identifier of areas where Real Estate will be strong. Both Alberta and Saskatchewan have very strong employment growth and large disposable incomes. These areas will benefit greatly from World demand of energy and will be Real Estate leaders for decades to come stick to the average price of the area you are investing in, as this is where 80% of the market is which equals ease of liquidity.
In summary, 2008 was the year of "who has the stomach?" which happens almost every decade. 2009 is a year of stability and recovery with small gains preparing itself for many years of increase starting in 2010. There is no question that it's time to make a move as most experienced investors are but, "do you have the stomach?"
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