| People always ask me if this is a good time to | | | | how the appreciation of the neighborhood |
| buy real estate. Or they ask me if now is a bad | | | | compares to other neighborhoods in the same |
| time to buy real estate. I have the same answer | | | | city. I'm not looking for a property that always |
| for both questions: I don't know. More importantly, | | | | appreciates. I'm looking for a property that does |
| I don't care. Don't get me wrong-if you're buying | | | | better than average in a slow market. This might |
| a property and plan to flip it in a few months, | | | | mean it depreciates at a slower rate. I also want |
| then the current direction of the market is very | | | | a neighborhood that appreciates at a greater rate |
| relevant. But if you're buying a house to live in its | | | | than average when the market is hot. While its |
| less important. Ok, wait-let me explain that. I've | | | | hard to find anything other than general |
| been in real estate a long time, and have made a | | | | appreciation rates for a city, a good place to start |
| decent amount of money buying and selling | | | | is a local realtor who knows the market well, and |
| properties. But whether the market is going up or | | | | who can tell you how different neighborhoods |
| down, I continue to buy and sell properties. | | | | have performed in the past. Secondly, I look for |
| Regardless of whether the market is hot or cold, | | | | properties in what I call "emerging areas." In the |
| it's going to change at some point in the future. A | | | | past, I've seen the largest appreciation for |
| "hot" market will cool down. A "cool" market will | | | | properties that were not in stellar neighborhoods, |
| heat up. Sure, it would be helpful to know the | | | | but properties in "rougher" areas that were |
| exact time a market will turn. Indeed, there are a | | | | improving. Even if the market is currently cool |
| lot of people that say they know exactly when | | | | these properties can be purchased relatively |
| the market will turn. They're all "100% sure, but | | | | cheaply. And if you wait for the next hot cycle |
| no one agrees. Because it's impossible to be | | | | these areas might turn from transitional |
| "100% sure." Simply knowing that the market will | | | | neighborhoods to the new "hot spot." While I can't |
| change in the future doesn't give you a | | | | predict when a market will turn, I do look for |
| competitive advantage, anyway. It's like saying it | | | | different things that might affect a neighborhood. |
| will rain at some point in the future-it's true, but it | | | | Is there a new strip mine moving into an area? It |
| doesn't help you know when to bring an umbrella. | | | | might be a good idea to avoid surrounding |
| Lets look at an example. I have a friend in | | | | neighborhoods. On the other hand, there could be |
| California. We talked about the fundamental | | | | a new development that might increase |
| problems with the California market, like lax | | | | properties. For instance, if you hear that an old |
| regulation enforcement. He told me he was happy | | | | chemical factory is about to be turned into a |
| that he hadn't purchased a specific property | | | | mixed-use development with cute little shops and |
| recently, because he knew the market was going | | | | expensive houses, it might be a good idea to look |
| to tank. So we talked about the property. It turns | | | | at surrounding neighborhoods. In summary, it's |
| out that the property he almost purchased at the | | | | hard to predict the turns of the real estate |
| time was worth 350k. It eventually rose in value | | | | market. But if you do your research on the |
| to 800k at the peak. Today it's worth 740k. | | | | property you are interested in and the |
| (Oops.) My point is that knowing the market will | | | | comparative appreciation of your neighborhood, |
| eventually change is not as helpful as knowing | | | | you can ride out the ebbs and flows of the |
| when the market will change. In the last 20 years, | | | | market and come out ahead in the end. |
| the Austin real estate market has gone through | | | | Ki Gray lives in Austin Texas and works as a |
| many cycles. Simply knowing that there are more | | | | realtor and an investor in the Austin Real Estate |
| cycles in the future is not helpful. If you are | | | | market. When Ki is not investigating the |
| buying a house to live in, its possible you'll see | | | | properties he enjoys spending time at the local |
| many hot and cold cycles in the real estate | | | | parks that pepper the Austin Landscape. His |
| market before you sell your home. So what's | | | | company Escapeso Realty offers a free search |
| important? When I purchase a property I look at | | | | of the Austin MLS. |