|
|
|
Current Market Conditions
|
REITS: Alternatives To Buying Real Estate
There
are a lot of us that would like to participate in the housing recovery,
but wont or cant invest large dollars in a home....prices are still
declining and if you are wrong you wont be able to get out. Thereby
becoming a late stage victim of the housing collapse and feeling
especially stupid for having done it. There are alternatives to real
estate investments that wont take everything you got and they are
liquid.
REITS
The
traditional method is to use REITS. You might think of these as mutual
funds that use real estate investments rather than company stock or
bonds as the underlying tradable asset. There are REITS that specialize
in apartments or storage or shopping malls, you can pick the sector you
think will do best. If you are wrong you can sell. Its a stock market
investment, they are as liquid as stocks.
RPX Index
Another method of virtual real estate investments
the RPX index, compiled by radarlogic. A real estate data and analytics
company, they created a daily price index of property using the MSA as
a basket. What makes Radar Logic interesting is that you can drill down
to a single MSA, almost a micro market. REITS are using broad asset
classes such as Mortgage REITS or Public Storage, Apartment or even
state REITS. But MSA's, now thats quite a narrow slice. If you know
your area and have deep convictions, you can make a bet on the
direction of price.
The RPX March Index Report:
The
report indicates the 25-MSA Composite has stabilized since January
2009, after being in a freefall for much of 2008. The Composite
declined only 0.3 percent on a month-over-month basis in both February
and March 2009, which compares favorably to the 1.2 percent and 0.9
percent declines in February and March 2008, respectively. The average
monthly decline in 2008 was 2 percent. They have a nice chart breakout
of the 20 MSA markets. Its a cool way to track real estate by sector
and stay on top.
According to RPX, Prices improved on a
month-over-month basis in 11 of the 25 MSAs tracked by Radar Logic. In
six more MSAs, home prices declined less from February to March than
they did from January to February. Buyers returned to California’s
housing market en masse in February, attracted by 2001 and 2002 price
levels and a fresh supply of foreclosed homes.
What is
intriguing about the approach is that you can drill down to your own
micro market, what you know best. If your wrong you can sell, quickly.
This should improve risk levels and allow people to participate who
might not yet be ready to buy in the physical world.
Chart Source: Atlantis Investment Company
REsourced from www.yourpropertypath.com
You may republish these articles, as long as you do not edit and you
agree to preserve all links to the author and Your Property Path.com
|
|
|
|
|
