Sure, the softening real estate market is driving prices way down in some areas, but the fact is it cuts both ways. There are some markets, and some investors, that are going to benefit significantly from the current environment.

I have buried my head in the sand for a long time in regard to prices in my hometown of Brentwood. Working primarily in the Tri-Valley, it was (for a time) a luxury I could afford. But then I met Rick and Paige,  buyers referred by a good friend, who had already set their sites on Brentwood, and I got the opportunity to take a look at my neighborhood through my Realtor eyes.

First of all, I can’t even begin to describe how fun it was to “sell” my town. The neighborhoods, the schools, the development plans - I realized how much a part of the community I am, and that I should be doing much more business here.

But then it hit me: these prices make sense again! Sure, my equity has evaporated, but that’s OK ’cause I’m not going anywhere.

On the other hand, for those investors who were going out of state to Arizona and Nevada, even New Mexico and Georgia looking for investment opportunities, your trip has just been cancelled! Follow me here…

The rental market in Brentwood is strong. All those folks who have been displaced by the current market - they may be losing their houses but they’re not leaving town. They have their kids in the schools, they have established family and social networks, they’re plugged-in to the community. And they’re staying here.

An average three-bedroom house should cost you less than $300,000 and should rent for more than $1500/month. Short version - it pencils.

And the upside appreciation? Well I’m sure the Atlanta suburbs are nice in the springtime, but this is a viable Bay Area community and prices are currently depressed by a glut of inventory and a lack of qualified buyers. Once the market flushes this out, you’re going to get “California” appreciation rates.

And when I look at what’s going on in Brentwood, I see the city planning, I feel the sense of comunity, and I look at how happy my family is here - I’m convinced it’s a winner.

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This entry was posted on Wednesday, March 5th, 2008 at 7:41 pm and is filed under Investing, Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.