High-endLuxury} Real Estate as an investment
For those thinking of investing in real estate in the high end of the market, prices seem to be reaching more affordable levels. The issue of raising the money still remains for those without ready cash.
The Alt-ARM mortgage resets this year and next will likely put more pressure on the down ward price spiral still being experienced by much f the world, but there are an increasing number of seller prepared to take offers lower than the asking prices. The market is still extremely diffiicult to judge, and some places such as Las Vegas are in a great deal of trouble.
The continuing banking losses and devaluation of commercial property will also add to the pain the sector is feeling. Timing is crucial – the inflationary pressure caused by quantative easing will eventually have an upwards effect on prices, but for the moment the trend is still downwards. The point where the two paths cross is the time to be investing in properties again.
Many analysts expect the downward trend to continue for another 2 years or so, but there are already bargains beginning to emerge that will probably represent the bottom of the market. With cah to spend, good quality property investment advice is extremely important.
Professional analysts are at odds with real estate agencies at the moment. The amount of reports that the probem is over and recovery is starting are beginning to overwhelm the independent opinions. Caveat Emptor – buyer beware. Realistically, the recent US stress tests on the banks were designed simply to mislead the population into over commiting to the sector. Solvent banks do not need large capital injections.
The UK banking system reported more losses in the first quarter of 2009. This is not a positive sign.