A Quiz You Can’t Fail: How Will You Make Money in Real Estate


As everyone knows, the real estate market is in the tank – at least that is the overall perception. On the other hand, we all have heard that there are people who are still making money in real estate. At least they say they are.

If it is true that people are making money, here is a quiz that should be a no brainer. By the way, this quiz won’t be graded. Not by me at least. You may decide to give yourself a grade just for grins.

The Setting

Lets say you live in a housing market that has been described by a national real estate forecast service as the country’s “weakest housing market.” It is projected to have the biggest decline in value in the next 12 months among all housing markets in the nation with a 12 percent median price dip for both new and existing single-family homes.

In making its determination, the forecast service looked at 260 metro areas using more than 50 variables, including housing supply, population trends, unemployment and inflation. And, speaking of unemployment, your area has just seen a full one percent spike upward.

Not downward, but upward. You also have to consider the steady slow dribble of job losses and the underemployed. That is the job market as it currently exists.

Add in the fact the supply of homes in the middle and upper tier of the market are also still fairly high. The low end of the market isn’t a consideration because those homes aren’t in the market. They are already owned or rented.

Your malls and shopping plazas and office complexes have a higher than normal vacancy rate. The small businesses once occupying these spaces have gone out of business or are barely hanging on.

The local Realtors’ association, as one would suspect, is happily optimistic and disputes every point mentioned by the forecast service. Trouble is you can’t go through a neighborhood and not see a for sale sign or one or more foreclosed homes. But, that could be optimistic for anyone who is lucky enough to buy at a very, very deep discount.

Key feeder markets for your area are still realizing declines which, by the way, are expected to extend into mid 2010.

Longer-term forecasts show stabilization within 18 to 21 months. However, when these longer term forecasts are spoken of, but not published, no one can pinpoint the authoritative source behind the forecasts. Hmmm…

The Quiz

You now have the details and an almost complete picture. I say almost because it is impossible to present a complete picture given no one has a handle on that thing called a complete picture.

Here is the quiz. If you want to make money in this real estate market, how are you going to accomplish that want?

Pretty easy question wouldn’t you say? I’d love to hear your answer(s).

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  1. My answer is quite simple…be a big fish in a small pond. What I notice is that Realtors are posting such general information about certain markets trying to get noticed by search engines. However, learn your community more by visiting businesses that out of state people may be interested in. Know the best pizza place or hair salon. Make yourself personable. It may take some time but I believe the slow steady pace will win out in the end. I am from the Lake Norman area of Charoltte but will not try and compete with some of the bigger franchises who market LAKE NORMAN. I try and market the specific neighborhoods in small towns surround the Lake Norman area. My blogs consistantly rank in the first page of google and yahoo. I have been sent referrals from other states and hope to continue my internet presence.

  2. Mike,

    Very good answer. Real estate does include businesses and if you are catering to the locals, the locals will reciprocate. At least that is how it works in my area.

    I would take it you use your VRE to support your local business???

  3. To make money in this or any market, the rules are the same. You need to know what you’re doing. You need to know your marketplace. You need a strong investor’s list. You need the constitution to be proactive. You need to take the plunge at some point and not get paralysis by analysis.

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