Good Values in Great Places to Be


If there is one overall skill that can help you prosper whether in the stock market or in owning real estate it is the ability to spot value. This is one reason why a couple of years ago, Merri and I decided to sell our home in Naples, Florida. We had lived there for 20 years, had family and friends. The place had grown from a sleepy fishing village into an exquisite cosmopolitan city.

Yet as Naples became "the place to be", it wore on our values. People changed, their ideas/values changed and we became more and more uncomfortable. Prices rose for everything, taxes, insurance, services, labor. Nothing made sense anymore from a value point of view. This was just no longer the place for us! This has been verified in a USA Today September 17 article entitled, "Where are prices too high?" This article lists cities across the USA where house prices may be bubbled. The top three cities are Naples, Florida; Tacoma, Washington and Boston, Massachusetts. (You can see the entire list below.

This does not mean that these are not great places to live, it just means that investing in real estate there now is dangerous because chances are you will not get good value.

Getting good value is related to area and to how you buy. For example, prices may be high in parts of North Carolina along the Georgia border, but as mentioned in Saturday's message one reader showed up to buy a 2.5 acre two creek lot expecting a price around $30,000. Only two bidders were there and the lot went for $8,200! These buyers found enormous value because they knew how to look where other buyers did not.

So when you look for great places to be, look in smalltown USA and then compare with prices elsewhere. Then look at ways (such as through trust deed and judicial auctions) – see http://www.garyascott.com/tedthomas/ – to buy in the areas that offer the best value in the areas that offer the best value.

Until next message, may wherever you are be a great place!

Gary

Where are prices too high?

Here are the cities listed in USA Today September 17 2002 page 8B as being overpriced markets:

    1. Naples, Florida
    2. Monmouth-Ocean, NJ
    3. San Jose, Calif.
    4. San Diego, Calif.
    5. Orange County, Calif.
    6. Colorado Springs, Co.
    7. Baltimore, Md.
    8. Denver, CO.
    9. Sarasota-Bradenton, Fl.
    10. Miami, Fl.
    11. Tacoma, WA.
    12. Mobile, Ala.
    13. Salinas, Calif.
    14. Boston, Mass.
    15. Nassau, Suffolk NY
    16. Seattle, WA
    17. Bakersfield, Calif.
    18. Redding, Calif.
    19. San Francisco Bay Area, Calif.
    20. Charleston, SC
    21. New York, NY

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