A New Year Prediction

I have not put an article in this space for a couple of months, for several reasons. One is that I was secretly hoping someone would notice. No-one did. Another, and more important reason, is that there is so much being said about real estate that nothing new seems likely to be said. But there is something. A prediction.

Buy. Now. Don’t be stupid, and don’t buy something you can’t hold, but buy. Everything vertical is now being offered for less than it cost to build. Prices may go down, but not much, and lower prices will be only occasional, and not predictable.

I can’t say “buy” any more plainly. Hedge funds are being created from New York to Andalusia to buy up the carnage after foreclosures and short sales. Those hedge funds are funded by many of the same investors who drove prices up during the silly years. Now those investors have come back in to buy for less than market value the same assets they drove up in price 3 years ago.

I have an idea. Let’s be them. Buy property you can afford to hold, and make up prior losses by booking future gains. Book your gains by buying in this horrible market, especially if the properties are income properties that can produce all or most of their carrying costs, and if you invest to hold these assets over time. Join with others to spread the risk if you consider that a good idea.

I cannot promise that Florida will beat Oklahoma in January. But I can promise that you’ll be proud of Tim Tebow, and from where prices are today, unless history is to be disregarded, real estate prices will go up more than they go down.

I have one more prediction. This one’s a sure thing. If you hated someone in 2008, leave it behind. You’ll be surprised how much better you feel in 2009.