Timing the bottom of the marketIt seems as though we are continually getting asked whether we are at the bottom of the Real Estate market and our reply is “we may not be at the bottom but we must be close”.

What we can tell you though is what we see happening with the deals that are being done and reasons to consider doing deals sooner rather than later.

THE BOTTOM
Unlike the stock market, the actual cost of real estate is a combination of price paid and the interest rate of any loan. The lowest price paid often is not actually the “bottom” and it is with this thought in mind and current interest rate trends that many believe the actual bottom may have already passed…

TIMING
The diagram above clearly exhibits another reason to work your deal sooner rather than later. The exchanges we are completing today are the tightest we have seen in twenty years. What I mean by tight is we have very little time in the exchange, sales and purchases often happening within days of one another. One’s ability to time a deal is better today than we have ever seen, and as you know time is the #1 headache in any exchange.

CONCESSIONS
Whether discussing one’s ability to time the deal, get terms on a deal, or working to get something built we are seeing people work to make things happen. Even municipalities are encouraging development in hope of fees enabling projects that in the past were not possible.

CAPITAL GAINS TAX RATES
Although we have been granted an extension of the Bush Era capital gains tax rates it is temporary with proposals that could increase those rates dramatically in the near future. Additionally, individual States with income taxes continue to increase their State rates. For those intending to exit real estate realizing a gain it is critical to understand what lies on the horizon.

JUST WRITE THE OFFER
Our advice is to write the offer that makes sense to you. The offer might get accepted or you may get the call 6 months from now asking whether you are still interested. We have had several deals recently where initial offers were promptly discarded yet the deal ultimately got done!