Real Estate is Worthless!

Hey Joseph~ I'm not sure you can create value, in my humble opinion. Econ 101: Supply vs. Demand. There are so many outside factors that influence the market that even the most savvy investor can't predict or control. A seasoned investor can make some general assumptions, as to how high he/she can expect to profit but I can't see them forcing a value. Value stands alone. Supply vs. Demand determines the Value.

Great reminder about the economics of supply and demand...and of course in a faltering economy, real estate isn't the only thing that's "worthless"....right now that is.  I was always told that the people who make the most money buy when no one else is buying. Of course, they have to be able to hold on to what they buy long enough for the shift in supply and demand.  Sometimes it's not about "creating" value; it's just about identifying the buyer who is in a position to buy...and wait...

Joseph,  Its important to keep in mind that these "depressed" properties that you are referring to as worthless real estate were at one time quite valuable.  What caused the abrupt change in values?  Yes, the basis of Economics and the Law of Supply and Demand where (for untold reasons) Supply far surpassed need or Demand.  Here in PA there are pockets of "Rust Belt" properties that savy investors have have taken from the bottom and actually reinvented them.  In your backyard one small pocket are the Reading Outlets which arose from old factory buildings into an entire retail complex.  In Harrisburg, Restaurant Row in the downtown arose out of a former downtown shopping district that had succumed to suburban malls. There are other areas many in small town with similar successes.  Its our job as Commercial Realtors to focus on clients with the ability to think outside the box and see potential value in these properties...the old adage that one man's trash is another man's treasure is certainly the case.  We just need to identify the tresurer seekers.

You are SO correct. So are Beanie Babies! Some things are so artifically inflated, they are bound to crash down to earth.

This reminds me, When I was in highschool, I had an older friend, (more of a coach, really), that owned a tract-home in a little sub-division off of I-45 near Pearland in Houston. He paid about $75,000 for his house, that looked like every 5th house or so on the street. Values were holding...He had to transfer to up East, and sold his house for $90,000. Not bad for that neighborhood 1989. Then ONE DAY soon after that, someone discovered that the subdivision had been built atop a toxic-waste dump. All kinds of things hit the fan AND the courts...eventually the houses were bought by the feds for a mere $5000 a piece-what they paid for the lots... The entire neighborhood, and even an elementary school was razed. Now the land just sits there fallow and fenced in. It was made a SUPERFUND site, it was cleaned, but there is NO way anyone would build there now. Good thing my friend Jim got out when he did, but it was pure luck. Now, those lots that were selling for $5000 for a 1/4 acre can not even be given away. That real estate literally is WORTHLESS, even those so much money has been sunk into that weed laden hell-hole.