Real Estate Market Timing

Good Morning!

These articles are hard because they allow for between 500 to 1500 words. I cram as much information as I possibly can into those words. It may seem disjointed but it all has a meaning, please accept my apologies.

You have an economic life and viablity. The first cycle of Real Estate investing is within your first five years. The second is within three, and last within two. It's a ten year cycle so let's look at a ten year national economic cycle.

Every ten years the United States government does the Census. The Census hires every able bodied person in the United States, if they want a job. It is the greatest non military mobilization of man power. At the beginning of every decade, no matter what, there is an up tick in employment figures.

The Department of Commerce publishes the Beige Book. It's a survey of economic data done by government surveyors going in to peoples homes and asking questions. Businesses also get surveyed.

The Department of Commerce runs the Census and Beige Book. The data reflects on the over all economy. Aside from employing millions of people that Census data determines what's hot in Real Estate. You want to own where the people are, and the Census tells you that.

Government data isn't that hard to track. It's published for every one to see. The same goes for all types of government data Births, Deaths, liens, or foreclosures. The data is all there for you to see.

The government runs on a schedule. The Census, Beige Book, Assesors data, Permits, changes in zoning laws are done on a schedule. So this gives you a picture of the market data and when it's available. Government data is a large force in Real Estate value. If you know where the off ramp to the freeway is going to be you know where the value of land will be increasing rapidly.

OK the national economy runs in a decade cycle due to the Census. I'm going to add in the Presidential election cycle which is every four years. Again elections employ a lot of people and there is a lot of money thrown around.

So if you look at Real Estate as the thirty year hold that it is, you are passing through three decades of data.

In any business you have start up costs that you hope will be returned. You don't have to be smart to hold out for thirty years. After fifteen years any property, no matter the price, is a good deal.

In the previous article I mentioned the yearly cycles of buying and selling Real Estate. Now I've covered the larger national picture. Locally there are also factors concerning State and Local governments that are harder to predict. Anything can happen locally.

There are elections, assesors data, and economic forecasts, but single forces can change that data radically. We see it here in a Boeing order, or troop mobilization. The best local data is the permit process, or Legislative session. Knowing what the development plans are for an area can give greater returns. This also establishes a pattern.

Taken together this is market timing. You are looking for a return based on economic forces. In the world of Real Estate there are a group of individuals who watch all of this data like hawks and invest accordingly. I'm not a big fan of watching data, but the data is there for every one to use. You should be aware of it.

Real Estate investing is a global business. For our purposes a national example in our region would be Idaho. At the last Census I had a discussion with a Census official who wanted to check the data on a 300% increase in population of a small town in Idaho. I said it was completely possible given the small town that it was. It got a Wal Mart. After the Census Data was released the town had a significant influx of people who were now aware of it's growing economy.