Timely real estate news………………………………………..,,, 18 January 2007
There is some really good news and some really bad news already in 2007.
The bubble is still here if you own property in San Diego, Las Vegas, or Miami — where homes have been languishing on the market for six months or longer. No one has to tell you about the ups & downs of the real estate, yet if you’re reading a daily newspaper over the breakfast table in Bel Air, Brentwood, or Beverly
Hills, you are counting your blessings: There’s lot’s of talk in the media about many areas in the US that are seeing sustained price devaluations but there also are some very healthy markets — in Boston, New York, San Francisco, Los Angeles, and Seattle: Each are enjoying an annual appreciation that outpaces the national average by at least 30% according to Business 2.0 magazine.
As you know, I was in Cabo over the holidays, amazed to see prices zooming through the tile roofs along Baja’s incredible real estate market.And that’s not all. My long-time marketing consultant travels to some of the hottest real estate markets on the Planet and reports back that home prices are soaring also in exotic locales like Antalya, Turkey and Marrakech, Morocco. “Second homes are selling for 800,000 Euros on lush golf courses in Marrakech,” Bob Liljenwall says. “Spain is going over the $1 million level everywhere, so the Brits and Europeans are moving south and into booming beachfront locales.”
But what about here…in our neighborhood? Prices continue to hold their appreciation over the past year. Inventory has increased, and the price increases werelower than in years past, but up none the less. of 3.7% over the previous year,one has to count their lucky stars here at home.
Location, location, location has always been the primary measurement for retaining home values…but as we have seen since we have returned to a ‘normal real estate market’ (thank goodness), price has continued to be the key indicator for how long homes last on the market. And price has more to do with economic conditions in the real estate market — over supply of new homes (like in Vegas, San Diego, and Miami), but there are also key points to look at, too.
Here are just a couple of indicators I follow that might help you in terms of measuring future residential real estate investments:
Income and job growth — these two are linked, of course, especially when you consider that prices will maintain their appreciation upward trends if there is competition for higher-end homes. When there is a strong job market, there is economic growth, and families want to (and do) move up to bigger
and pricier homes. Likewise, where there are new companies moving into the market, they trigger home building and demand for homes in the ‘best/better’ neighborhoods, which provides the continuing price appreciation, as we have found on the Westside.
But what we enjoy here on the Westside, of course, are our inherent attributes — great weather, strong business growth in a variety of industries, and great community assets. No market is bubble proof…but
when you are looking beyond the steady performance of Bel Air, Brentwood, and Beverly Hills (as well as other strong communities such as Pacific Palisades and Santa Monica), don’t assume that bubble can’t burst. Just ask new condo owners in San Diego, Las Vegas and Miami. A word to the wise….
Here’s to a wonderful, healthy and happy New Year for all of us.