From The Desk of Chris Mygatt - June 2007

Real Estate Market Forecast Looks Brighter For Second Half of 2007

Several real estate industry observers are forecasting a steady rebound in the real estate market for the second half of 2007 for several reasons. Foreclosures have shown a steady decline following a record year in 2006, and demand for homes is rising in select neighborhoods that offer a desirable location and the value that buyers demand. In addition, inventory for the second half of 2007 should be lower than at anytime in 2006.

In the new construction segment of residential real estate, builders will tighten their belts relative to standing inventory. They will be much more conservative and patient for the market to rebound. Attractive discounts and other incentives will continue to attract buyers seeking the special ambiance of buying brand new.

Many experts and real estate investors believe that demand will increase due to improvements in local employment, a projected 40,000 net in-migration for the state for 2007, along with strong per-capita income of an estimated $41,000 for 2007.

According to Denver Investor Real Estate News, the high-end market in metro Denver has been particularly resilient the last few years. Sales of high-end properties ranging from $900,000 to $9 million have been brisk and strong enough for speculation to abound. The newsletter also states that current statistics warrant caution for investors in the high-end market.

Investors essentially have two options in 2007 due to relatively flat values in the overall market, slowly declining inventory, and incrementally improving demand and economic conditions. First, you can buy properties at prices as low as possible and that will cash flow as rentals, which you will hold for several years anticipating future appreciation. Picking the right locations is critical to this option.

Second is to focus on very specific neighborhoods that are showing solid demand now, finding the properties with hidden value where you can correct deficiencies without going broke, and which you can then sell for a reasonable profit. The next 12-18 month period is your opportunity to buy at the low end of a market cycle. Those who wait 18 months will be able to see the curve heading upward, but you'll also have more competitors seeking the same investments. Source: Denver Investor Real Estate News, www.DenverInvestor.com.