Emerging Real Estate Markets

Emerging Real Estate Markets

What is an emerging market?

A Real Estate Market that has the potential to appreciate very quickly during a three to five year period.

Examples:

Phoenix – Sun Microsystems brings in 20k new jobs in the 1990’s, the market appreciates over 42% in the next three years.

Dallas – The Metroplex attracts over 120k new jobs between 2005 – 2008. The market appreciates over 46%.

The Holy Grail in identifying an emerging market is job growth.

Market Cycles:

  • Seller’s Market I
  • Seller’s Market II
  • Buyer’s Market I
  • Seller’s Market II

SMI  – Seller’s Market Phase One:

  • Supply Dwindles
  • Property Selling Fast
  • Time on Market at Lowest Point
  • Unemployment Low
  • Property Prices and Rent Rising
  • Demand at the Highest Point

SMI  – Seller’s Market Phase Two:

  • Time on Market Increases
  • Supply Increases
  • Seller Waiting But Still Gets Inflated Prices
  • Construction Pipeline Excessive
  • Business and Job Growth Slow

BMI  -Buyer’s Market Phase One:

  • Market Still Oversupplied
  • Prices, Rent Falling
  • Time on Market Increasing
  • New Construction Stagnant
  • Unemployment Reaches Height
  • Foreclosures Rise Sharply

BMI  – Buyer’s Market Phase Two:

  • Market Absorbs Oversupply
  • Time on Market Decreases
  • Job Growth Increases
  • Existing Properties Rehabbed
  • Rents begin to Slowly Increase
  • Prices begin to Slowly Increase

Characteristics of Good Markets:

  • College Town
  • State Capital
  • Big Box Retail
  • Health Hub
  • Strong Leadership
  • Major Interstates
  • Airport with One Major Airline Hub
  • Population 100k+
  • Shopping Hub

Why Emerging Markets

  • These markets can generate higher than National Returns
  • Initially Not As Much Competition
  • Trade Up Faster
  • We Invest Like the Institutions Do

What’s Next?

Expand Your Business or Personal Holdings using the EM Approach Today! Contact Platinum Commercial Holdings and speak with us about our Equity Investment Programs.