Reading the Real Estate Tea Leaves
Man, has real estate been the place to be for the last five years! Even real estate mutual funds managed to kick a whole lot of ass, turning in a 5-year annualized performance of 18.56 percent versus only 4.9 percent in the S&P 500. Though naysayers argue the party has to end soon, boosters argue…
Man, has real estate been the place to be for the last five years! Even real estate mutual funds managed to kick a whole lot of ass, turning in a 5-year annualized performance of 18.56 percent versus only 4.9 percent in the S&P 500. Though naysayers argue the party has to end soon, boosters argue that if the economy can continue to grow without inflating, real estate could continue to be a rewarding sector. Not many people are making the case the the huge returns can continue. As Morgan Stanley’s Ted Bigman put it to investors, “We’re sorry you missed the best run-up that we had in years, and we strongly discourage you from expecting comparable returns. However, having a meaningful allocation still makes sense.”
Beware of Warnings About Real Estate [NY Times]
Income and Values are still too far apart… sideways is the best we’re gonna get for a while (maybe not in some nabes) especially if % rates keep creep up … flat yield curve ….. what does it mean?
Inventory is building up, interest rates are up from last year. I see a stabilization this year, followed up by a decline for 2-3 years.
I think the macro environment feels a lot better for real estate now than a couple of months ago. Combined with bonus checks clearing this month, I think we’ll see a significant pick up in activity.