Real Estate Investing is All the Rage Again. Should You Cash In?
I wrote last weekabout the housing markets that were the best bets for residential real estate investors, suggesting that home buyers could use the advice as a clue to which markets would turn around soonest.
The top picks were Raleigh, N.C., McAllen, Texas and Austin, thanks to their strong
pre-recession population growth, slowing home-price drops and a mix of jobs that’s weighted toward growth industries like government and education (the entire top ten list is past the jump).Our list, compiled by Cary, N.C. real estate research firm Local Market Monitor, wasn’t looking at the markets that were currently the healthiest, but rather which had the greatest chance for price appreciation.
You can, of course, invest in real estate without buying a home. Commercial real estate investment has also picked up dramatically. Real estate funds and companies brought in $9.18 billion for all types of property acquisitions in August — more than double what they raised in July, according to real estate investment adviser CoStar.
Of course, $63.26 billion raised this year is pocket change compared to the
industry’s pre-2007 heyday, when REITs took in $200 billion annually, but there is money to be made in careful commercial investing.
industry’s pre-2007 heyday, when REITs took in $200 billion annually, but there is money to be made in careful commercial investing.
Investors looking for a way into the market should seek an adviser with low fees, who can acquire nimbly and quickly, and has a multi-year track record in the industry, says CoStar consultant Norm Miller, but they should closely watch commercial market conditions.
“It’s not a bad time to buy, but I’m not going to tell you we’re at the bottom on prices,” he says.
“It’s not a bad time to buy, but I’m not going to tell you we’re at the bottom on prices,” he says.
If, however, you’re looking at the investing trees (individual housing markets) rather than the investing forest (pension funds, mutual funds, REITs, hedge funds and other companies that put money into all types of real estate classes, but mainly commercial), here are the top markets for conservative investors (see the article for more detail on why):
1.
Metropolitan Statistical Area: Raleigh-Cary, N.C.
Q2 2010 Home Price Change: -3%
Three- year home price forecast: 0%
Population Growth, 2000-2005: 18%
2.
Metropolitan Statistical Area: McAllen-Edinburg-Mission, Texas
Q2 2010 Home Price Change: 1%
Three- year home price forecast: 7%
Population Growth, 2000-2005: 16%
3.
Metropolitan Statistical Area: Austin-Round Rock, Texas
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