The moment any one utters the dreaded ‘R’ word the real estate industry seems to shake, rattle and collapse. Mortgages, borrowing, house selling and buying and house building, all slow down. Especially during a Recession. But not emerging real estate markets.
Yet, housing never really stops being in demand. People always want somewhere to live. Real estate investors who have seen the market go through its ups and downs know what to do. When the economy temporarily stalls what is required is an emerging real estate market to allow them to make money on the same scale as when boom times are there.
This is how it works:
Emerging real estate markets are created out of a real need. Which is then coupled to generous local incentives necessary for the development of a region. As such it is totally recession proof. Perfect for the savvy real estate investor who has managed to spot it first.
The reason an emerging market is recession proof is because it is driven by its own micro-economic realities. Independent of the larger economic picture. A new industry moving to town creates an influx of new jobs. It attracts new people and brings with it its own people and all these generate a buzz.
In response, the local government provides incentives to help them with their relocation. They do this to ease the expected pressure on housing.
This attracts new supporting business to the area. Helps other start ups get going and attracts even more people and suddenly you have a boom-town in your hands.
The pressure-cooker conditions this creates are perfect for closing deals fast in emerging real estate markets...
... and making good money from them. The skill of course lies in being able to correctly identify an emerging real estate market as it emerges rather than chase the far more risky tail end of it.
Here’s the truth:
An emerging real estate market always Peters out* and begins to normalize and reflect the rest of the economy. This means that the window of opportunity is small indeed and the real estate investor worth his salt knows when to get in and when to get out.
One of the things we cover in the courses we give is how to recognize an emerging real estate market and what processes you need to have put in place in order to be alerted about it and identify it correctly.
The thing you need to be aware of is that emerging real estate markets are like gold mines. You need to find them, work them and then move on, all the richer for the experience and with your bank balance better off.
*The earliest known use of peter as a verb meaning dwindle relates to the mining industry in the USA in the mid 19th century, and it is reasonable to accept that that is where it originated. Thoughts of US mining at that date bring to mind images of the California Gold Rush, which is sometimes suggested as the source of this phrase.