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BUY OR NOT TO BUY, THAT IS THE QUESTION
Some
decisions are tough to make, especially when it comes to purchasing
property in today’s uncertain real estate market. National
figures clearly show a decrease in sales, a buildup of housing
inventories, and increased buyer resistance to making a commitment
until they see the dust settle.
Interestingly
enough, here in Sedona the market continues to flourish, albeit
at a slower pace, except at the luxury level where there is sustained
momentum. Why are higher end sales holding up so well? It could
be that for some people money is not an issue. Another possibility
is that some people may be analyzing the current situation as
a window of opportunity not to be missed, a chance to make a sound
financial investment that will pay off in the not too distant
future.
From
my perspective, those people doing their homework are making a
pretty safe bet. The Sedona area is a cluster of private islands
entirely surrounded by an ocean of National Forest wilderness,
and with no room for physical expansion. With a limited supply
of land and the unrelenting pursuit of people wanting to live
here, its inevitable that property prices will resume climbing,
regardless of what happens in the rest of the country.
What
will drive this demand? Primarily the demographic wave of Baby
Boomers, now in their fifties, looking to either turn their 401(k)s
into good IRA investments, secure a second home as a prelude to
retirement, or buy land in the expectation of outstanding capital
gains. This demographic wave will not soon subside. A decade from
now Baby Boomers II, now in their forties, will need to further
bid up prices if they expect to gain access to what will then
be a considerably diminished supply of land.
Right
now is probably the best opportunity for an astute buyer to take
advantage of today’s market lull. I believe it to be no
more than a temporary event. During the latter half of 2007 I
suspect buyers will be lamenting to their real estate agents,
“You know, I should have done this a year ago” as
they sign on the dotted line.
Hamlet
questioned what he should do . . but sadly he had no one to turn
to for advice. Perhaps, if he had considered a sale of his castle,
I could have located a buyer for him, but aside from that, I doubt
I could have helped him reach a decision.
The
far more important question is, can I help you avoid Hamlet’s
predicament?
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