Q&A talks real estate with Greg Rand, a 20-year real estate veteran and author of Crash Boom from Career Press. Rand is CEO of OwnAmerica in Rye, NY., a regular Fox TV news contributor and host of Rand on Real Estate on 77 WABC Radio in New York.
Q: Real estate prices have been down and nobody seems sure yet where the bottom is. What’s your take?
A: One of the key elements of a free market is chaos. Chaos is how the markets figure out how to move forward. The important thing to realize in the midst of all these people talking about ‘the housing market’ is that the market isn’t some nameless, faceless thing that lumbers around aimlessly as if it has a life of its own. The market is made up of buyers and sellers. People, just like you and me, who are trying to figure out how to buy low and sell high. It doesn’t matter if you’re a homeowner or an investor. The secret to making sure your real estate doesn’t turn into a money pit is to watch the trends so you can predict where the prices will rise and where they won’t.
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Q: So what are your trends to watch?
A: Here are five:
• Short-Term Pain — Show me a market where home prices are back to 2002 levels, and I will show you a market that is overcorrecting.
• Overdevelopment — One of the reasons the market is overcorrecting is overdevelopment and speculation, as is the case in Florida. Another reason is that the job base has eroded, like in Detroit. Isolated, explainable, short term distress is the secret. Find your Florida.
• Jobs, Jobs, Jobs — Track employment trends to see where companies are moving, and you will see a harbinger for long term housing demand.
• Lifestyle — Nothing drives migration patterns long term more that the pursuit of happiness. Look at climate (the Carolinas), leisure trends (Colorado) and cost of living (Texas) for triggers on where the market may shift.
• Responsible Government — Look at the state government. Does the state and city in question reward or punish risk-takers? Are you likely to suffer if you succeed there? If so, find somewhere that appreciates entrepreneurs. There’s nothing worse than putting your money on the table, only to have it redistributed.
It comes down to the idea that no matter how the markets change, no matter which way the winds shift, people will always need a place to live. That’s been true of America since the first log cabin. If you plug into that concept, and leave fear in a box on the shelf, you can be ahead of the curve and ride the wave of the trends that matter.
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Q: Here in Central Connecticut, the job base is shrinking and the tax level is rising. But for a lot of people who have jobs, this is a great place to live and home prices are down. What’s your advice — buy or sell, invest or look elsewhere?
 A: The shrinking job base should be temporary and only connected to the current recession. Investors can look for properties that could not generate positive cash flow (rents covering expenses), a few years ago but can now because prices are down and rents are rising. Central Connecticut is a stable market. People need and want to live there. Many investors are only comfortable buying in places near where they live and work. I agree with that sentiment. For those who are comfortable going out of state, check out the places where you go on vacation. Not for a second home, but for a rental property. Do you go to Florida? Major bargains are there right now, and many folks from the Northeast have a comfort level there.
