real estate

Making Sense Out of Recent Direct Real Estate Investment Trends

real estate
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Investors with extremely high net worth have started to take a second look at real estate according to some recent market figures. A recent survey found that over half of wealth managers and private bankers feel that the amount of money their clients put into real estate will double over the next five years. Less than 10 percent of wealth managers expected to see less money put into direct real estate investment funds.

North American Real Estate

Despite many news stories that would suggest otherwise, North American real estate remains quite popular with wealthy international investors. The same study suggested that more money would be spent on direct real estate investments in the United States and Canada than in any other nations. Some financial experts feel that this kind of maneuvering will ultimately lead to higher prices in domestic real estate markets.

Domestic Investors Chime In

Domestic investors were quick to note that this kind of movement has actually happened several times in the past. Consider the case of Louis Ceruzzi. He purchased a house on Nantucket back in 2004 during a property bubble when fewer and fewer high-end homes were available to rent. He ended up taking the plunge and purchasing a home on the island as property values continued to rise. There was still a way to get a good deal on a home, however.

He purchased the house for considerably less than it was originally worth because it had been on the market for so long. Ceruzzi was able to get a deal as a result, and ended up saving quite a bit over renting. Rental costs have a tendency to spiral out of control whenever regular property values begin to rise.

Looking at Market Trends

Nothing is permanent, and the Nantucket example serves to prove that everything comes in trends when looking at the real estate market. That being said, these market studies seem to suggest that the North American property market should remain strong for some time to come.

Most of these figures seem to suggest that high-end homes will see the biggest appreciation when it comes to property values, but there’s no reason that this rising tide shouldn’t raise everyone’s values as well. Those who are interested in taking advantage of a temporary increase on prices might consider putting their houses on the market. They should be aware of a few things first, however.

Rising prices can also mean higher fees and taxes when it comes time to actually close on a house. Interested parties should always be sure to speak with appropriate agents before making any big decisions.

Those in the field of business might also be interested. Developers could soon be looking at purchasing existing high-value homes and putting them back on the market. This might be a good deal for them if they can avoid overpaying for properties that they wish to later turn around and sell.

Other people might end up taking Ceruzzi’s example and purchasing expensive properties in lieu of renting existing ones. That could end up saving them a substantial amount of money depending on what they pay for the property. They might also consider the fact that he was able to purchase a home that had stayed on the market for quite some time.

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