The key to successful investing is buying low and selling high. This is obvious, but what is not so obvious is exactly when those times are.
The Real Estate market in the Upper Peninsula has followed much of the rest of the Country in resent years in a downward path. We usually lag behind most of the National market. Markets are extremely localized and vary from town to town. In the Upper Peninsula, some areas have been hit much harder than others. The residential markets in the more sparsely populated areas of the U.P. have been slow and prices have come down significantly. The larger cities, however, have sustained good residential markets. There has been a reduction in values and home sales across the board, but areas such as Marquette and Houghton have been stable.
The markets for vacant land, camp and cottages, second homes, and investment properties have been much slower. These markets are more dependent on National economic conditions and regional buyers. With the turmoil in the stock market and high unemployment, these markets have suffered in the past three years. There are large inventories of listings in these markets causing values to fall.
Right now it is a buyers market because of the large inventory and in some cases desperation of sellers. The question is; will values continue to decrease? Will the National economy continue to suffer causing hesitation to purchase? These are tough questions to answer, but my opinion is that now is the time to buy.
By the time the National economy gets back on tract, the markets will recover and the opportunity to buy on the down side will be gone. Prices have come down on some properties up to 50%. Buying now seems risky, but in the large scope of things is the correct move. Values will recover in the long term and the best move is the get in before they start to go back up. Look to purchase properties in the segments of the market that have traditionally strong, but are currently week.
The other driving factor that makes now the time to buy is interest rates. I do not believe that we will ever see interest rates this low again. Purchasing under these conditions can set up a perfect situation for an investor. Locking in a record low interest rate while purchasing a property that has the potential to double in value in the next 10 years is an opportunity not to be missed.
Not every market will recover equally, and there is no telling how much longer we will be in this rut, but I believe there are some really good opportunities to invest in Real Estate in the Upper Peninsula right now.
