22 Feb 2010
Mixed signals of economic recovery are starting to show up in the real estate sector. These signals vary from stabilization in declining markets, to increases in values in emerging markets. As real estate is done on a local level, these signals are not a national indicator, but rather a measure of what is happening in that specific market. So how do sophisticated investors read the signals and decide how to take action?
Markets in all four of these states are suffering from 10%-16% unemployment rates, 12-16 months of overwhelming supply of single family homes, negative migration (because of the high unemployment, high costs of living, etc). Investment properties, as a whole, are struggling with decreased occupancy rates and plummeting rent rates in these states. These are all reasons why values will stand still for many years to come in these areas. Click here to read a related article.
Savvy investors will look for low unemployment rates, employment expansion, and demographic growth. Single-digit vacancy rates for investment properties are also an indicator of high cash flow returns. Check the supply of available units in the market, as well as new units scheduled to come online in the next several years.
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It's important to target markets with recession-resistant economies, such as energy, health care, defense, and education. Also, cities with global exposure and national significance tend to suffer less in economic downturns. Various markets in Texas, Oklahoma, and Louisiana answer to this criteria. Click here to read a related article.
Oklahoma City is a great example of a market with a stable labor base, a recession-resistant economy, and a low overall multi-family physical vacancy rate. Click here to read a related article.
Capital Growth Investment is active in multiple markets of Central Texas, the Oklahoma City metro area, and Baton Rouge, Louisiana. We are pleased to announce the recent acquisition of a 40-unit apartment building in the OKC area, as well as a condominium project in San Marcos, Texas. More than $500,000 was raised collectively for these acquisitions.
If you would like to learn more about how you can participate in one of our offerings, click here.
Questions? Comments? Contact Us!
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Ofer Goldenberg is the CEO of Capital Growth Investment
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