The Six Stages of the Long-Term Real Estate Play

I talk a lot about trends in housing.  One of the ways to make money in any real estate market is to buy correctly.  How can you spot the next Aspen or Scottsdale?  Here are the six stages to watch:

1- If looking for the next hot ex-urb, look for a small town that is surrounded by natural beauty.  An old mining town in Southeastern Arizona, a former mill town on the river in Massachusetts, or an unnoticed beach town on the Gulf of Mexico.  This is the period where the real cowboys invest.  Their plan is to buy land and promote it.  There is a bar and gas station in town.   There is no chamber of commerce.  Your friends will refer to the town as "bucolic".

2- Look for the artists and tradespeople.  If you see galleries and studios replacing tattoo parlors you have a good chance of making a killing in this market.  Artists like physical beauty and a sense of community. More importantly, budding artisans are VERY frugal with the dollar.  While I can't prove it with data, I just know these left-brained thinkers have a "sixth sense" about seeing the big picture.  The chamber of commerce is made up of the artists and the failing gas station owner, meeting at Joe's Tap Room once a month. Your friends will refer to the town as "funky" at this point.

3- Independent coffee houses and resale shops  follow the artists and it benefits everyone.  Customers need a place to eat and drink while shopping so these little businesses come in.  They take over the abandoned gas station and call their shops names like "The Shell House"  or "X-ed ON".  There is still room for upside here.  The Chamber of Commerce is hosted by the newly converted bed and breakfast in town and the mayor and police chief have joined. Your friends will call this village "quaint".

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