A July 6, 2010 article by Ben Johnson, Contributor to NREI, reported on new numbers from a recent study by J.P. Morgan Asset Management — titled “Market Pulse: Alternative Assets Survey” — showing investors believe commercial real estate could rebound significantly over the next 12 months and are resuming their steady march from so-called “traditional” investments to the “alternative.” Broadly speaking, alternative investments include real estate and other real assets.
This news comes on the heels of another industry player stating that we are at the beginning of a recovery — note investors: its getting late to act, we're leaving the bottom, so act now, right? According to John Burns' Local Building Market Intelligence(TM), we are at the “beginning of a recovery.” The consultant notes the 3 factors that need to be in place:
- Demand – Job Growth is coming back slowly and renters are slowly figuring out that this is the best home buying opportunity of a lifetime
- Supply – New construction is at an all-time low, and will likely stay low until the bank REO selling subsides and private builders can find capital
- Investment – Mortgage rates and home prices have fallen dramatically, to create the best consumer affordability in 30+/- years.
The Group also noted that “We are at Stage 1 (The Bottom) and heading into Stage 2 (The Beginning). While we think Stage 2 will last longer than usual, we want to point out that the downside of investing in housing right now is about as low as you will ever see.”
Market timing is a key. Looks like Burns' group and institutional investors agree that real estate NOW is THE investment. Do you?