Housing Market

Far from earth, there is a race of people who look a lot like us. Their planet and their star are unpronounceable, but if you string any 13 consonants together with no vowels, you can come close. These people have learned to travel at will through space and time. They fund everything they need by speculating in real estate on populated planets throughout the galaxy.

Just to give an example, they visited Orlando, Florida in 1900 and bought several houses, which they sold just before the big flood of 1904 and the drought of 1905. They came back in 1909 and began building homes to sell in time to catch the big boom that started in 1910. They continued buying and selling but got rid of the last of their holdings before the bust in the mid 1920s.

After Depression and fruit flies, our aliens returned in the late 1940s to buy real estate in time to make money from the huge boom of the 1950s. The earth visitors whispered some details to the right people, and air conditioning appeared to make life in Florida pleasant. Outer space came to Cape Canaveral in 1955. Disney followed a few years later, and real estate boomed. Knowing that “9/11” was coming, the visitors sold some of their holdings in time to miss the downturn, but they have been buying a little ever since.

So what are the aliens doing now? Obviously, they have an advantage in knowing what is coming. People who have studied their strategies have noticed several trends. First, what goes down, eventually comes back up. This isn’t always true. There are places around the US, especially in the western plains, where grey old ghost towns speak of failed mines and train tracks bypassing the town.

Still, areas near navigable waters, with highways, airports, and colleges will attract businesses. New businesses mean employees who need places to live. With paychecks coming in, they can buy those houses. When the demand for houses exceeds the number of available units, the prices start to rise. Our aliens can afford to buy at times when everyone else is panicking Their reward comes when jobs come back and people want houses. Thus they buy when everyone else wants to sell, and they sell when others are buying.

Another trend people have noticed is that the aliens tend to buy houses in the lower to middle part of the price range, Apparently, their theory is that there will always be a market for well kept inexpensive homes, while high end homes have fewer potential buyers. Generally speaking, they will buy a dozen less expensive homes before buying into the “fancy” homes market.

Turn to the MLS homes listings for Detroit today. There are listings for houses with 1200-1300 square feet of living space as low in price as $9900. (Take out your American Express folks and buy yourself a house.) A house with the same square footage in the suburbs of Washington DC could easily sell for $150,000 or more.

Rumor has it that the aliens are planning to share a technology that would allow someone to live in Detroit and use a transporter to take them instantly to and from work in Washington. Imagine what that would do for home values!

The cardinal rule of investing is to buy low and sell high. Too many people miss the bottom of a price cycle by trying to wait for one more drop. The same people fail to sell at the top, because they hope to get a little more.

If you decide to buy, buy smart. Look for homes that are well built, near schools, clean neighborhoods. Buy homes that you or a family member would be comfortable living in. If possible, rent it to a responsible occupant until the market changes. Keep it in good repair. Keep the lawn in good shape. All these things will preserve your investment. Then, be patient. Your reward will come. Don’t believe me? Just ask a space alien.