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The three primary determinant of real estate value is: location, location and location, as the old saying goes.
There are regional differences. Within each region, there are also huge differences in Beta (volatility). So far the suburbs, especially outlying regions have dropped far more than the "fortress" area. The inner core of a metropolis like Manhatten and DC have actually gone up in price instead of dropping.
IMHO, that could change with the coming wave of self-driving cars. Commute becomes much less of a problem when you can read or exercise while being transported in your own car that drives itself. Being able to get home after getting wasted at a bar will cease to be a city living privilege.
David Losh
2013 Feb 17, 6:08am
I don't have a dog in the fight
No you didn't have your dog in that fight, but that discussion lead me to another discussion on another blog about locations in Seattle.
We have a couple of lines here, South of I-90, and North of 145th. They define Seattle, in terms of value.
We have transit links through out Seattle, but these areas are stubbornly behind the curve in terms of value.
Banks, however blurred the line in terms of loans they made and it appears like some of these areas are offering huge discounts in the foreclosure auctions, or short sales.
As prices rise some people think these areas are also rising. I did a Comparitive Market Analysis for a client in one of these areas and he has in fact lost $70K in equity when he felt he was rising.
My point would be that it isn't always a good idea to buy a property, because I don't think we will have the same rise in pricing we have always enjoyed. Some places will languish, and continue to slide.
SkyPirate
2013 Feb 19, 5:45am
Prices in Atlanta bottomed out around 3rd quarter 2011. Buying activity heated up in 1st quarter 2012 and investors poured into the market. By mid-2012, the juicy deals were mostly in the rear view mirror. By 3rd quarter 2012, the buyers "late to the party" were finding limited/uninteresting inventory.
David Losh
2013 Feb 19, 6:29am
Prices in Atlanta bottomed out around 3rd quarter 2011.
We sold a place in Atlanta in 2011, and it had been on a steady decline since 2008. From what I looked at Atlanta was always a depressed market, and will continue to be.
If the strategy is like Roberto's and investors bought for rental income, there may be some hope, but very little. I don't see Atlanta as viable as Phoenix Arizona.
Roberto, and I had a spirited exchange on another thread about Chico California. I felt Roberto was using the market place in Phoenix as an example of what could be done in Chico.
My point is that these are vastly different locations with different economic factors.
That lead me to the fact I could have invested here in Seattle Washington, but we never really got the amount of discounts in pricing I would have expected after the Real Estate crash. Our Real Estate market place is vastly different than Phoenix.
We are thirty miles North of Tacoma Washington however that does have similar qualities, and opportunities that Phoenix enjoyed.
In my opinion Roberto's market place in Phoenix was the right place, at the right time. I would prefer to have been in Phoenix after the crash, than investing in Tacoma Washington.
When I really think about it, even here in Seattle there are places that are good solid investment opportunities, and other areas of Seattle I wouldn't touch.
It's all about location, and the opportunites that location can offer. In a broader Real Estate market sense there are still some safe havens while other places have a lot of equity to lose.
Banks lent a lot of money over true value. Some of those bets are paying off, and others continue to decline.
What makes a great location so your Real Estate holdings are worth keeping?
#housing