When people find out I work in real estate they make that concerned/contorted expression and wincingly ask, "How's the market?"
I try not to make it sound like a knee-jerk response, but I have to clarify with another question, "Which One?"
The markets I'm in are good. The ones I'm avoiding are not so hot.
There is no such thing as "one market". The facets of real estate that I currently specialize in are:
- Investment Properties
- Land
- New Construction
Each has its own niches... some sections of each market are very good... some troubled. Regarding these market segments, here is what I'm seeing in the Phoenix area.
Investment Properties:
- Great buying market- the excess inventory allows buyers to purchase homes that should return to an elevated equity run. Much of this is based on an ever expanding population and solid job-building market.
- Bargains galore- but this requires due diligence. Investors need to research value pricing verses price buying. Some low priced homes are not worth the investment while others may be in optimal locations.
Land:
- There is a great deal of land for "pennies on the dollar" ... the big problem is "what dollar?" are we talking about. There are costs associated to land that are a little trickier to figure out. Sellers will rarely be able to give you an accurate estimate of what they have invested in the land... this because there are nebulous opportunity costs involved.
- Banks don't want to touch most land deals and are requiring more upfront money to do deals than in times past. Banks would rather see improvements, such as property on the land that have a value that is more tangible and easier to appraise. Otherwise there is too much speculation involved.
- In spite of this- there is a land grab going on. Prices are very good right now.
New Construction:
- The supply is still quite large and the discounts abundant. If purchasing new, be sure to employ an agent who specializes in new homes and is constantly monitoring who has the best deals.
- Yes- many builders are accepting a limited number of investors.
- Yes again- it's possible to buy positive cash flow properties- these are homes than can be rented for more than the cost of the financing.
Finally- is it a good time to buy?
Many want to wait for the bottom of the market. Who knows when that is? My theory is we'll know a few months after the fact- when a group of "braniacs" point to a date on the chart.
I've noticing some areas of the local market that are obviously not at the bottom yet and others that are already on the upward swing. If you're interested in my take on "the market", give me a call or drop me an email.
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Chuck Willman is the founder of USA Vest and is an Arizona based real estate agent with Gentry Realty.
He helps people find and purchase cash flow positive properties.
Chuck can be reached at 480.292.0600 or chuck@usavest.com .
I enjoy that question. "how is the market" ha it makes me laugh.
Thomas- I've noticed the seasonal part especially lately. Some markets have a very narrow window.
Suellyn - you're welcome here any time! One great secret about your area though... goodness- the weather is great!
Great response! It's important to educate people on the different markets and to let them know what you specialize in. This is a great lead in to an elevator speech.