Unofficial Real Estate Thread

[Ski_Banker]

I think it is hard to come to conclusion for the market as a whole. Real estate prices around my restaurant has continuously gone up an average of 7-9% every year because of all of the big developments around the University area.

I just purchased a house around here and I had 2 other people that were behind me with higher offers. I paid the asking price, and I was first to put in an offer and had to agree to their counter which was the original asking price. I was trying to purchase another town home before, but lost it to another buyer.

My old house I am moving out of however hasn't gone up in value at all. I'll be lucky to get what I purchased it for plus the improvements I have made to the house.

Stick-e, I really enjoy a lot of your philosophical posts. Truly. But, to add a cheesy quasi seemingly Buddhist touch here, "you must separate the past from the present from the future" student. :wink: :smile:

(From my understanding, Denver hasn't run up that much in the last few years, so you're probably much better off than other big cities. Very favorable demographic trends, too, for Denver -- the city with the best weather on the planet -- Colorado. )

 

[JadeFox]

What does everyone think about companies like Forest City Enterprises and Koar Wilshire Western who are building these amazing (but pricey) condos in Los Angeles and Koreatown? Some are saying they are bubble proof markets, with foreign investments coming in at over 300 million over the next two years. I wouldn't mind it if the prices on these drop so I could purchase one. It seems that they are having problems selling. An interesting point of fact is that 80% of the people who have deposits on condos in The Mercury building are Korean or Korean-American. They sure are putting a lot of stock in the project, but considering that Korea has lifted its cap on overseas property investment from 500,000 to 3 million means that there are a lot of shoppers in the area.

 

[TigerNSX]

As in investing in the equity/fixed income market, investing in real estate depends on your risk/return preference. If you have a long-term perspective in investing, you should invest in whichever area that you feel comfortable.

Currently, Hedge Funds and PE are tremendously popular (some hedge funds managers generating over 40% return over S&P500, and big PE shops like KKR overwhelming the market with big purchases), but many folks are concerned about some sort of bubble in those areas. Who knows? We will have to wait and see. Analogously, the RE (along with REIT) market has been ups and downs. My guess is that the mean-reversion still holds in RE - if it was up, it will come down, whereas if it was down, it will go up. So to answer your question, the metropolitan area RE market, on average, has experienced downturn during the last year. Therefore, as of 4/2007, it will be steady until next year or so. Then, it will start moving up towards 2009. This is my short-term guess.

What does everyone think about companies like Forest City Enterprises and Koar Wilshire Western who are building these amazing (but pricey) condos in Los Angeles and Koreatown? Some are saying they are bubble proof markets, with foreign investments coming in at over 300 million over the next two years. I wouldn't mind it if the prices on these drop so I could purchase one. It seems that they are having problems selling. An interesting point of fact is that 80% of the people who have deposits on condos in The Mercury building are Korean or Korean-American. They sure are putting a lot of stock in the project, but considering that Korea has lifted its cap on overseas property investment from 500,000 to 3 million means that there are a lot of shoppers in the area.

Where did you find this? This is a great information. Wealthy people in Korea are having trouble finding the right investment opportunity. There is abundance of cash floating around that needs to be invested. Their preference of investing has always been in RE (the majority of them accumulated their wealthy via investing in RE in Korea/China). Are these buildings currently in construction?? I would like to find out about more information. Please PM me.

 

[JadeFox]

Tiger,
Just google "The Mercury Koreatown," or "Solair Wilshire." These are just some of the condos that are going up for sale. Like I said though, they're not doing too well right now. But these big construction companies are really trying to change the image of LA to make it more like New York (think LA's the Golden Mile). As time changes though, I'm sure these will be prime pieces of RE to own. I've heard that some are even giving up their spacious homes in the OC to eliminate commute time. PM me if you have any specific questions after that.

 

[ShiftyBob]

What does everyone think about companies like Forest City Enterprises and Koar Wilshire Western who are building these amazing (but pricey) condos in Los Angeles and Koreatown? Some are saying they are bubble proof markets, with foreign investments coming in at over 300 million over the next two years. I wouldn't mind it if the prices on these drop so I could purchase one. It seems that they are having problems selling. An interesting point of fact is that 80% of the people who have deposits on condos in The Mercury building are Korean or Korean-American. They sure are putting a lot of stock in the project, but considering that Korea has lifted its cap on overseas property investment from 500,000 to 3 million means that there are a lot of shoppers in the area.

Same thing was said about the Condo-tels in Vegas The Turnberry towers started building right before the big boom. Luckily I bought one in the first phase for around $300k as an investor incentive. Very quickly the market skyrocketed and before they could even finish the first tower, the second tower was near sold out. By 2004, the average price was around $900k, with a lot (if not most) of them above the $1m mark. I bought a second one at a GREAT deal off of an investor in early 2004 for around $600k (worth $1m) and quickly sold that one mid-04' to a well known movie star for well over double what I paid. Word got around pretty quickly that it was the place to be, and next thing you know there are movie stars, athletes, producers, anybody who had some extra money to throw around; they were buying them for close to the $2m range. It was at that point that I almost bought a completed one in the top of the first tower for $2.2m and I was going to make it my office. I went and looked at it, and it was absolutely AMAZING, with Bamboo floors, granite everywhere, Plasma TV's in every room, stainless appliances, a balcony that overlooked the strip, and the wole wall in master was a glass window that overlooked the strip also. I decided it was a little too extravagent for an office that I'm only at once a month (if that), so I passed. It was a good thing I did, because it was within 6 mos after that the market started declining. The Condo's had gotten so expensive because of all the money being thrown around, that nobody else could afford to buy them when most were going for over $1m. Everybody was trying to sell, but they couldn't because they were upside down. Some people paid close to $2m for a condo that is barely worth $1m now. I still have an office there on the 24th floor, but it was the first one I bought at $300k so I could easily sell it, but I'll hold onto it for a while and see what the market does out there. I think the average selling price now is hovering around $700k (don't know, haven't really checked). MGM is also still working on their condotels, but I know the prices have dropped dramatically...

 

[TigerNSX]

Thank you so much for providing the info, Jadefox, and sharing your insight, ShiftyBob.

Jadefox, I am definitely intrigued by this. I am going to investigate this and get back to you if I have more questions.

 

[Ski_Banker]

Tiger,
Just google "The Mercury Koreatown," or "Solair Wilshire." These are just some of the condos that are going up for sale. Like I said though, they're not doing too well right now. But these big construction companies are really trying to change the image of LA to make it more like New York (think LA's the Golden Mile).

Keep in mind that the ONLY thing that goes up in value in RE is the land. Everything else depreciates. Land value + concrete/stucco = property value. Concrete and stucco costs about the same everywhere. I'll buy when nice S. Florida places are 50% of current prices.