The Boston Real Estate Market - Should You Be Buying Or Selling At The Present Moment?
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by: Adriana Noton
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Word Count: 574
Date: Wed, 24 Mar 2010 Time: 11:05 AM
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During the past eight to ten years, property markets in most English speaking countries have formed a similar pattern. The Boston real estate market followed these trends closely.
At the beginning of the 2000s there was a prolonged period of rising prices. Many analysts in fact talk about a housing bubble. While the population of Boston was declining, house prices kept on growing at an amazing rate.
Rising house prices of course mean higher mortgage bond repayments for the consumer. In the case of Boston this soon led to a situation where the average consumer could barely afford the installment of the family home he or she bought.
We are all familiar with how the story went from there. Home owners started to default on their mortgage bond repayments. The banks started to repossess these homes and sell them at auctions. This created a situation where the market was flooded by too much inventory, which in turn led to sellers being forced to drop their asking prices. Soon a downward price spiral started.
Does this mean that now is a bad time to invest in a home in the Boston area? Two years ago the answer would no doubt have been yes. At that time businesses and prices were still dropping in real terms and it would have taken a relatively long time before you could recover your investment.
At the present moment it seems as if the market has stabilized. Prices no longer drop at an alarming rate and if we listen to the economists, it would seem that the worst is over.
When it comes to investing in the property market, the same principles count as when you are investing in the stock market. The mistake made by many novices in the marketplace is to buy high and sell low. They buy when prices are at their highest, then cling to the investment only to sell when prices hit bottom.
The secret of any successful investment is to buy low and sell high. You should try to determine when the market has reached its bottom before you buy. Then hang on to the investment until it's clear that the market has reached its top before you sell.
Right now it would seem that the real estate market in Boston is very close to its turning point. Once it has turned, prices will first start to rise gradually. As demand increases, the rate of price increases will accelerate and it will only slow down again when the market approaches its top again. In investment terms, this is therefore the right time to invest in Boston real estate. Those who wait to buy until prices have reached record levels again, will have to wait a very long time to make any profit.
A savvy investor doesn't consider a property investment as a way to make quick money. He knows that it normally takes five to ten years before you show a good profit. An investment in the Boston real estate market is guided by the same principles. Buy now, when prices are rock bottom. Sell five to ten years from now when you are bound to make a substantial profit
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