Real Estate Growth: How Long Can It Last?
Sunday 17 February
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by Motiva Group
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There has been speculation in the media recently about the fact that real estate will begin to fail and implode as it can only handle so much growth.
In my humble opinion these theories don’t hold a lot of merit and here is why. First, understand that there are three basic things that undercut the validity of saying that there is a real estate bubble that people are operating in.
1. There is no “international” or “national” real estate market
2. The real estate market doesn’t explode or crash
3. The market has limited impact on the seasoned investor
The Real Estate "Market" is an overall view of micro markets nation wide.
When people talk about real estate economics they are usually referring to national or international statistics which in truth are made up of thousands on micro or local real estate markets. So even though you might find a North America wide trend there are still many, many markets which will be completely at odds with the overall numbers.
Real Estate Markets do not “Crash.”
We all remember October 19, 1987, known as “Black Monday.” The stock market lost 22% of its value in one day - what investors call a “crash.” History points to times which real estate values have taken 22% hits in certain cities and in pockets within cities. However, no real estate market dropped 22% in one day, one week or even one month. In fact, the real estate “crash” of the late 1980’s took several years to bottom out in most markets.
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