I sold my condo in San Diego in July 2004 netting over $100k. I was wondering where to invest the proceeds. I definitely didn't want to invest anywhere in California so I started looking out-of-state. I started learning about market cycles and how different states perform in relation to California.
I found out that there are three kinds of states; momentum states, opposite states and “do nothing” states. The momentum states go up right along with California like Florida. The opposite states actually have an inverse cycle to California, like Utah and Colorado. The ‘do nothing' states bascially do nothing, like Texas. In the past 25 years it's appreciated 89%. Considering inflation at 3.5%, it didn't beat even inflation.
Long story short, I decided to invest in Salt Lake City. Based on the historical data I dug up, I predicted SLC would see a 50% jump in prices over the next 4 years. At the time, Utah had been flat for several years and this optimism wasn't shared by my agents in Utah nor my friends in real estate intelligence firms either. Anyway I bought 2 homes in November 2004 for $210k [includes closing costs] and booked 10 more since then. One of them has gone up $60k and the other $35k. I just closed on one house last month. In the 6 months it took to build, it's gone up $45k. Since then, I've tied up with builders, developers and property managers and am tying up stuff at wholesale prices which I'm passing on to my investor friends!
It pays to do your own research!
San Diego, CA