What is a Real Estate Recovery?

Charleston Real Estate - What is a Recovery?

I have talked to many bankers, appraisers, real estate agents and even local economists and I find it fascinating that everyone has their own definition of recovery. Based on this, I have concluded that a real estate recovery is determined by one’s personal position and what they need to accomplish.

Most property owners determine recovery by looking at what they paid for a property and then looking at what they could sell it for now. Here are two examples of how a person could come up with two totally different opinions.

Example: (Both owners are in the same market)

Seller ‘A’:  Purchased the property for $200,000
Seller ‘B’:  Purchased an identical property for $100,000

Seller ‘A’:  Current property value is $175,000
Seller ‘B’:  Current property value is $175,000

Seller ‘A’:  States the market is still bad
Seller ‘B’:  States the market is recovering or is doing great.

Summary:

I deal with this above example everyday. What we must understand is that recovery is about the REAL ESTATE MARKET… it is NOT about one’s financial position.

Our real estate market is in RECOVERY. Unfortunately, this recovery may never be enough to turn a bad investment into a good investment. Neither of us can determine this over an email or a written explanation.

What should you do?

I believe anyone who owns real estate should immediately review their property's status:

• Review your current market value
• Review your current cash flow
• Review your 5 year plans
• Create a strategy

Think of your real estate like it is an investment. Think of it like a stock or mutual fund. You need to review it periodically. This doesn’t mean you have to sell but at least take a look at it and commit to a strategy.

Let me know how I can assist you in creating a strategy for you and your investments.

I am committed to helping clients like you make great real estate decisions.

Greg Harrelson, Charleston Expert Advisors

Century 21 Charleston Real Estate