Real Estate investing seminars and San Francisco real estate
A reader asks:Lately the radio and television commercials have been full of ads telling people they can make a lot of money either full or part-time in real estate. However, the latest San Francisco Chronicle reports in a July 16 article that "as market softens, your best strategy may be to cash in". This article was reprinted from the Wall Street Journal and does not say which market the writer lives in. What is your opinion? Is the time to make money in San Francisco real estate over?
Our reply:
Not all markets are created equal. Different places experience different market conditions. When real estate markets start leveling out, it does not happen everywhere at the same time. A lot of this has to do with what the perception is. True, the Fed is steadily increasing the short-term interest rates on fears of inflation. In turn, this causes a lot of "chicken littles" to start shouting that the sky is falling. However, this is not exactly true.
While long-term interest rates for home purchases have gone up from 2-3 years ago, they remain reasonably low. However, like the oil and gas prices, they are constantly in the news as reporters try to find the next "crisis". So in our opinion the market is what it is because a lot of people believe the same thing at the same time. Think about it. What has changed that significantly over the past year? Mostly people's perceptions.
While it's true that San Francisco Real Estate, has cooled some compared to the frenzied sellers market of a year ago, the same thing is not necessarily true for all areas of the United States. Hawaii has experienced a slow down on the Big Island while Honolulu on Oahu is bustling with activity.
In San Francisco this is good news for buyers since properties are sitting on the market longer making it easier for people to get the house they want without having to compete with other buyers or deal with multiple offer situations.
However, your question deals with a specific investment strategy. Right now, San Francisco is not the place to be "flipping" real estate (buying a property and turning around and selling it for more). But if you are in for the long term, then buying and holding is still a good idea in San Francisco. Like anything else, wealth building with real estate takes time and effort just like a "real" job. But if you enjoy the effort then it doesn't feel like work.
With regard to that Chronicle article, we could not find the link to the original article, but we did find one reader's editorial reply to it:
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Cashing in fast might backfire for investors
"Editor -- Regarding the story 'As market softens, your best strategy may be to cash in' (July 16) -- that is the exact strategy not to suggest to most real estate investors.
"Flipping property for a quick gain only aids in generating hyper-appreciation and false values to the market. Of course investors want to get on board when the market is on an upswing. When the market levels out and when there is correction in the wind, you gloom-and-doomers come out of the closet and promote the get-it-now philosophy. That only poisons the well for sensible investors who are not looking for the overnight sensation.
"If you want to do day trading, get into the stock market. Any seasoned real estate investor knows to invest for the long term, sell when you meet your business plan and never panic-sell. That only drives values down. We are entering a correction. History proves that prices will fluctuate and the market will stabilize, then take advantage of Chicken Little."
- Walt Coughlin, Point Richmond
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Well said!
- Mick Orton
posted by SFResidence.com @ 10:17 AM
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