The “Fiscal Cliff”, “Y2K”, the “Mayan
End of the World” and “Black Monday”: all of these events and more have come
and gone without an economic calamity unfolding. Fear is the greatest factor in
markets and cycles.
Some of the fear factors have
effects on the economy, but in the end the markets adjust and move forward. I
am totally convinced that 2013 will be a dynamic year for real estate, stocks
and other investment opportunities.
My predictions are as follows:
Real estate in the Los Angeles
market will continue to be a safe and wise investment. Last I checked,
they were not building any more land and Los Angeles is booming! Apartments,
office buildings, retail stores and shopping centers and industrial properties
are in high demand. There is a huge need for more and more space.
This is not a spec bubble, but real
growth and requirements by end users. The biggest users are the apartment
dwellers. Currently, there is a shortage of units in Los Angeles. The hipsters
are looking for space in Downtown L.A. and surrounding areas.
I think that there are hidden deals
and one place I recommend is the San Fernando Valley. WOW! Who would have
ever thought that I, a Downtown expert, would be touting the valley. When I was
single, I would not date a valley girl as it was geographically undesirable (sorry
girls). Today, the valley is one development away from a similar boom as Downtown.
Ventura Boulevard is an amazing street that has an unending collection of
fascinating businesses that will demand growth. There is a great need for
shopping and various attractions that will make the area a second Downtown
(development-wise). It just needs a smart developer to bring the vision. Like
AEG brought Staples Center (and the Lakers and Kings) to Downtown. Like Rick
Caruso built the Americana in Glendale.
Part of the success of any vision
is a cooperative business-friendly government. We have a big election
coming in March and Jan Perry is a proven commodity for Mayor. She provided the
foundation for the city support for the entire AEG empire development, and will
champion the same type of growth for the San Fernando Valley.
I think President Obama should meet Jan Perry and discuss how she guided Downtown Los Angeles back into amazing prosperity. It's a blueprint for cities across America!
The stock market will have its
annual correction, as that is how it works. But I think we will see a 15,000 or
better Dow Jones industrial average in 2013. I am not an avid investor in
stocks (I just own some Apple and a little real estate investment trust called
Two Harbors). I also have a small amount of gold and silver. I see $2,000/oz. gold
and $40+/oz. silver, but as always, check with your professional advisors and don’t
rely on my opinion.
In regard to real estate, I
recommend that you buy, buy and buy, as Los Angeles will continue to boom. We
had a banner year in brokerage last year and 2013 is looking to be as good. We
saw warehouse prices go back up to $100-$150 per sq.ft., and mass
investment/speculation on land for development of apartments.
The driving force is demand and that
is supported by cheap money. The opportunity to own something with a cheap loan
is amazing. I suggest you buy something in the area and hold. It will multiply over
time for sure. Don't over leverage yourself. You should have six months in
reserve, just in case your tenants can’t pay the rent. And don’t forget to set
aside money to pay the real estate taxes, as they can sneak up on you. Now is
also a time to look at your portfolio and investigate refinancing. Rates are
very low and you can save money and make money by lowering your interest rates.
May 2013 be a prosperous year for
you!
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