stages of boom in real estate prices paid for the lots that go to market are well above the real value because it takes into account future expectations. While the real estate cycle continue to rise, developers who buy land will offset the premium paid by the sale of homes to promote and to be launched at a price greater than the time of purchase of the site. The problem occurs when expectations are not met, because the boom phase is complete and has not adequately analyzed the market situation.
We can distinguish two types of promoters: optimists and realists. The optimists are those who only consider the past when making decisions, consider that if the price of housing has risen sharply in recent years, the trend is the same and worth buying soil but this is find a very high price. This type of promoter obtained high profits during the boom phase but can accumulate heavy losses when the cycle. By contrast, the realist looks at the current situation before making a decision and adopts a more conservative stance, which prevents the boom times but get the maximum benefit that protects you in case the market goes into recession. The realist sell part of its land portfolio when he warns that the current situation will worsen and buy elsewhere.
A large number of entrepreneurs, small and medium, have difficulty in locating new opportunities to purchase land outside their usual geographical area. When land prices reached very high levels in your area reduced its rate of purchase. Developers should consider the economic outlook, demand for housing and land development in other areas than usual to find new investment opportunities. These mainly include: urban soil populations are not affected by the housing crisis and solar likely to be downgraded.
stage in the housing bust, will not lower the price of housing in all municipalities. There will be areas that will still maintain a moderate growth rate and that may be due to the arrival of heavy industrial investment, domestic or foreign capital. However, most people just avoid the falling price of housing if they build major new transport infrastructure.
In the real estate world, the largest creation of value does not occur through the construction of a building, or their sale, or in land development. Occurs when a municipality reclassified agricultural or industrial land and turns it into building land.
0 comments:
Post a Comment