If you are in commercial and residential real estate, take a look at this CNBC interview with Mort Zuckerman. The editor of US New and World Report and owner of the Daily News and more importantly Boston Properties talks about the demand in residential and commercial real estate.
He is pessimistic about the residential real estate market. So much so he is making me nervous listening to him. On the upper end of the commercial real estate market is where he sees the value. The low end of the commercial market will also suffer as successful companies move up.
The video is 8 minutes long but I really think it is a smart watch for anyone in the real estate industry.
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Yes, I believe we are in for a long recovery. Everything is in gridlock from the building, to the buying and to the selling of real estate. Not sure what will bring us out of this housing mess?
The second evaluation method relies on the premise that the price is formed based on the tax obligation that needs to be paid when making the housing deal. This is not true, because taxes are usually avoided by all people and the price formed this way is unsustainable. It could be either below or above the fair price based only on the desire to minimize taxes.
We generally made a clear connection between the fair price of a house or apartment and two other markets – the credit market and the rental market. We also argued that the price is driven mostly by the interest rate, at which the banks and clients are willing to operate and the rental income this real estate could accumulate over the years. We also explained why generally all markets are not in equilibrium and how a good investor can estimate the fair price and take actions to accumulate more wealth.
I see housing prices dropping for the next three years
Prices
Economists are projecting that prices will not see any appreciation in 2011. Sellers who had been waiting for 2006 to return will come to the realization that waiting any longer makes little sense. They will instead decide to get on with their lives and sell this year.
Prices probably will soften further. However, the possible savings to potential buyers will be minimized by a rise in interest rates.
Bottom Line
This is the year that normalcy returns to real estate. People will buy and sell based on the desire for a better life for themselves and their families. They will realize that is the true value of homeownership and they will be willing to pay for that value.
It is still because of this poor current economic situation, it is really affecting the industry.
I think that blanket "Real Estate will drop" or "Real Estate will go up" statements are ridiculous. In my local area (SF Bay) real estate values have already gone up in some neighborhoods. Some are still dropping and many are staying the same. Even during the "BOOM" years there were areas in the US where home values dropped considerably.
Prices of real estate must need to get back where they can be affordable for people again.
I definitely believe that the housing market is going to continue to suffer as the economy is still horrid and the unemployment rate continues to remain high.
Supply constrained markets is a key phrase. Land locked cities like Manhattan NY – you can't make anymore of them. Leawood Kansas in Kansas City or Mission Hills KS are examples in my neck of the woods. There is nowhere for those cities to grow so the supply is constrained.
I have a web site where I give advise on penny stocks and stocks under five dollars. I have many years of experience with these type of stocks. If their is anyone that is interested in these type of stocks you can check ouy my web site by just clicking my name. As far as MR zuckermans views go I would totally disgree although I believe that prices may stagnant for quit some time we have not yet experienced a really really large drop in the prices of houses in most areas of the country' when compared to the enormous increases that had taken place from early 2000's to mid 2000's' although I believe it could be more that ten years before the housing markets returns to what would be considered normal. Also keep in mind that area like the southwest and florida are great places to now buy a summer home because of all the empty condos and houses. Also these areas will now be much more attractive places for americans and international investors to invest in or buy a summer home at a great price.
the economy is really going down. but i guess this will survive and remedies will be made.