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Is Bay Area Real Estate Risky Business?
from: Kirsten HawkinsBay Area real estate is an ever-increasingly popular investment
for prospective property or home owners in California. The
location is prime, and the price is always right. Whether it is
due to the area's oil-rich location near the shore, the
beautiful weather, the breathtaking views, or the
pocket-fattening constant tourist traffic in San Francisco, the
Bay Area is a very popular choice of locations for both
prospective real estate agents (who are seeing dollar signs,
most likely) and prospective purchasers.
Since 2002, property values in the Bay Area have been rising;
increases in interest rates have caused the actual cost of some
properties to go up as much as 40%. For this reason, many people
are selling their properties at extremely high prices, equaling
higher commissions for the real estate agents who receive a
portion of the property's purchase price as payment for their
services. Just as there are people who are selling their
properties at high prices, there are just as many investors out
there who are willing to purchase these slightly over priced
homes, office spaces, warehouses, or other properties just to
turn around and sell them back when the values shoot up again.
It could be said that, while all investments are risky
(especially when it comes to real estate) the values of real
estate in the Bay Area is usually easily predicted, and is
somewhat a safer and wiser investment than other real estate
opportunities that may come your way. The average price of a
home in the Bay Area is in the neighborhood of anywhere from
$500,000 to $650,000 and while your investment could backfire
should these properties drastically decrease in value, smart bay
area real estate investors wait to sell until the prices go up,
maximizing the profit margin they could make off of the sale..
Of course, breaking even never sounds as good as making a hefty
profit in your financial endeavors, but as an investor in Bay
Area real estate using your head can have you doing well for
yourself most of the time if not all of it; it is important not
to forget that a reserve of start up funds is always necessary
to enter into such a hefty investment as Bay Area real estate.
Bay Area real estate investors are beginning to start up a
pattern of spending beyond their means when it comes to these
high-priced properties. Federal guidelines state that one should
not take out a mortgage that equals more than 30 percent of your
total monthly income; most wise people would take such legally
mandated "advice" to heed, but more and more people are throwing
monetary caution to the wind and, in attempts to catch a
prospectively profitable investment opportunity many do get
caught up in the ever-increasing housing market crashes, losing
money in the end. Of course, some people are more affected by
this than others.
Bay Area real estate is a great investment for the smart
investor, who knows the market well and pays attention to the
fluctuations in property values.
About the author:
Kirsten Hawkins is a real estate expert from Nashville, TN.
Visit http://www.king-of-real-estate.com/ for more information
on real estate, mortgages, and finding the house of your dream.
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