America is home to accidental millionaires.
These are
they who didn't plan on becoming wealthy; it just, for lack of a better
explanation, sort of happened.
This is how an older friend explained
it to me. "I arrived in town with hay in my ears. Bought some land way
out
there and then everyone else showed up. I didn't think
this land
was worth much more than I paid for it and next thing I know it's
valuable."
It is the law of supply-and-demand in
action.
Unless we can learn to harness lava flows or
inexpensively build
offshore islands, we simply aren't making more land. We're working with
what we
have here. As population increases, the available land decreases. This
scarcity
drives up the price. It's why we're seeing narrower lots or vertical
buildings where "horizontal building" was king.
That's how it's supposed to work.
What about today?
Today we have the buyer's dream scenario.
Currently
we have lower prices- even in spite of
population growth. It's not supposed to happen like this, but
for a combination of
reasons it has. Though people are continuing to move into Arizona,
builders
have built beyond the need- creating an excess of inventory. Also,
credit has tightened- which has limited the buying pool. Finally, there
is speculation in the market place- the feeling that prices could go
lower. We just don't want to pay retail- do we?
At some point the abundance of inventory will
subside. Then the pricing will return to previous levels. After that? Prices will increase again-
that is the way it has
worked for generations and it’s unlikely
we’re on a dawn of a new age-
one in which populations decrease and people don’t need
homes. I assure you- some parts of the valley are beginning to rebound. The key is knowing where.
So... For all you aspiring accidental
millionaires out there, I
offer this secret: Buy low.
--------
Chuck Willman is a real estate agent based in
the Phoenix, Arizona metro area. He helps people find homes and
investment properties in
the fast growing cities within Maricopa & Pima County, Arizona. He can be
reached
at www.AZvest.com
- chuck@azvest.com
- 480.292.0600
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Accredited Buyer's agent & Listings Pro. Specialties: investors, first time buyers & international clients in the Phoenix Metro area including: Gilbert, Mesa, Scottsdale, Tempe, Chandler, Queen Creek.
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Hi Chuck! Buy low is right. Low is prevalent in many areas, but there could be 'low-er.' So says Soros this morning. Holy cow. Good thing I can type, bookkeep, muck stalls, take photos, etc.!
Susie- and I agree with him... many areas have room to fall. Population growth is a big factor- locations that have it are maintaining or slightly improving right now. Areas that don't are languishing.
Who is best helped by all this? People buying for the first time. While we who work the industry are straining at the percentage differences, they're off with one simple quest- find a place to live at an affordable price. Yep- we have plenty that meet that description right now.
For the speculators- those who swoop in for bargains, I'm getting more phone calls this month than last.
Good post! "you make your money when you buy" is my maxim.
Li
Li- so true. The hard part of the equation though, is no the definition of "low". If only we could predict the future. I have the feeling we'll be talking about 2007-9 as those years where certain bold folks made their mark.
Just read this one! Great post. Great time to buy low!
Chuck- I have this personal philosophy that, although there are always bargains to be discovered in every market, it's the zenith of the doom and gloom that is the absolute best time to buy. Fear is a great price suppressor.
The last sentance is worth millions.....now people just need to have the guts to do it!
I have to add an addendum to your ending: "Buy low - and when money's cheap!"
Catchy title, great plug for Localism! You are such a marketing whiz!
Thanks for the idea!
If you have some cash now is a good time to buy real estate. You will not get rich sitting on the sidelines, that is for sure.
Pam-It does take some guts... but then again... isn't that what investing is all about?
Kent- Hey.. that looks like right now.
Mirela- If only. :-)
Robert- It's a very good time... who knows how long the superlow prices will be around.