While we've known it was true, we were surprised as anyone to see the mainstream media get it right. After years of depreciation, homes are simply a more stable, highly undervalued asset than gold or stocks. We've seen scores of students make fortunes off of homes, and now Fortune magazine agrees. Fortune cited Mike Castleman, founder and CEO of Metrostudy, a company that has spent three decades tracking real-time data on the inventory of new homes in America. His thoughts? "I'm a dirt-road economist who sees what's happening on the ground, and in 35 years I've never seen a shortage of new construction like the one I'm seeing today. The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses. And in most markets the price of new homes is fixin' to rise, not fall." In US, while a glut of new homes and bad loans caused the housing crash, today we see a shortage, meaning that home prices are increasing. In fact, we expect to see a sudden surge in price in the near future. Folks are buying homes again, and after years of hurt, the construction companies cannot meet the demand. While Fortune did warn us that the housing boom was going to end years ago, their song has changed. They understand that simple supply and demand will rule the day. Through in low interest rates and high rent to a market short on homes and you have a recipe for increased sale prices. The fact that new homes are starting to be built in Phoenix, California, Florida, and Las Vegas is further proof that the US market is rebounding. Those markets were hit the hardest, and have the most bank-owned properties available. If you can sell new homes in a market full of distressed properties, well, then things certainly are on the uprise. It takes time to get construction going again. As the housing market heats up, the supply will dwindle. So now, while there are still surplus properties, is the time to buy. The market is heating up and there are only so many homes out there, people will pay a premium when supply is short.
Now would be the time to invest in real estate anywhere. Sources: CNN/Fortune
Jagdeep Singh, B. Arch.
Real Estate Broker
Direct Tel: 647-287-4644
Direct Fax: 866-450-9199
Formally educated as an Architect, Jagdeep Singh is Toronto REALTOR™ consulting on both resale real estate and new developments. Powerful Local Focus on Real Estate with a Global Perspective™
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