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Montana 1031 exchange qualified Intermediary, 1031 Property Exchange, points out the importance of selling in inflated markets to find greater opportunity and lower your risk in other geographic markets.
“Real estate has always been a very localized product and all markets nationally do not move up and down at the same time or rate”, says Rusty Squire, Qualified Intermediary and President of 1031 Property Exchange. He adds, “Investors are going to want to start paying close attention to their gains, especially in highly inflated markets in view of the recent increases we have seen in interest rates”.
“Rising interest rates always act as a discounting mechanism for the value of housing because as rates rise less and less people can afford a given home”, says Squire. He adds, “If supply remains constant and buyer demand is dropping this is a recipe for price declines”.
“Montana 1031 exchange markets are generally all resort or vacation oriented and vacation homes are the first thing to go when the economy hits a rough patch”, says Squire. He adds, “This is why resort markets saw nearly double the rate of decline that primary residence markets did in 2008”.
“Markets in Montana, especially Bozeman and Big Sky, are substantially overheated and there are other geographies around the country that have seen far less price appreciation that are poised for future gains”, says Rusty Squire, Qualified Intermediary at 1031 Property Exchange. He adds, “Montana 1031 exchange markets are generally above their 2008 peak prior to the real estate collapse and a lot of the other markets around the country are not”.
“Investors need to start thinking about where the largest generational ownership group, the Baby Boomers, are going with their money”, says Squire. He adds, “Resort markets are very likely to blow up and lose incredible value as the aging Baby Boomers liquidate”.
“Markets like Arizona still sit well below their 2008 high prices and will benefit from retiring and aging Baby Boomers”, says Squire. He Adds, “Colder northern climates will likely not be benefactors and now may be a very good time to sell in those northern resort markets like Jackson, Bozeman, Big Sky, Sun Valley and others and move that money elsewhere”.
“In a lot of cases these big-name resort markets have seen two and three-fold increases off of the 2008 lows but where is the big group of buyers that are going to drive these markets forward in the future”, says Squire. He adds, “Our company can’t see it and investors have to remain smart about diversifying their real estate investment dollars geographically to account for where demand will grow”.
“Investors need to try and avoid the geographic trap of always investing in the same communities, generally the communities that they live in, just because familiarity makes them comfortable”, says Squire. He adds, “As we saw in 2008, real estate can lose a lot of value in a big hurry and thinking that will never happen again is not wise and will not protect your gains”.
If you would like help understanding your 1031 exchange options then simply call Rusty Squire, Qualified Intermediary at 406-425-2742.
Release ID: 392709