The crash — when home prices dropped everywhere — at first hid this bifurcation of markets, but we’re now seeing the differences. So far only Denver is a seriously overpriced market, but Los Angeles, Dallas, Phoenix, Tampa, Seattle, Miami, Portland, Austin, San Francisco and Salt Lake City are almost sure to follow. Meanwhile, Chicago, Cincinnati, Detroit, St. Louis, Pittsburgh, Atlanta and a host of smaller markets will continue to offer housing at reasonable prices. WHAT INVESTORS AND LENDERS CAN DO It’s always easiest to do what you’ve been doing all along. But the changes we’re seeing in the real estate markets aren’t just a temporary phenomenon, they will become more important

as time goes by. Real estate is like a giant ship that doesn’t turn quickly. Will homeownership crash below 60 percent, below 50 percent? Not any time soon, but averages can hide what’s happening at the edges, which is where investors and lenders have the greatest opportunities. My first recommendation: be careful in 2018 if you invest in the Denver- like markets I listed above. Home prices and rents will still go higher but you’re looking several years down the road, when a local crash will become more likely. Second, rentals will continue to be in demand everywhere. In the slower- growth markets you need to be more careful about your purchase price, and you need to be more picky about the location of your property. Third, keep an eye on the local

economy. Unless you plan to buy a property and hold it forever, give yourself options by staying on top of local job growth and local home prices. And lenders — get busy with new forms of financing. Regular mortgages will remain a staple, but buying/leasing a home should be as easy as a three-year lease on a car. One party owns the asset, one party pays to inhabit the asset for three to five years, and the lender puts it all together. And there’s a lease-to-buy option. •

Ingo Winzer is the Founder and Presi- dent of Local Market Monitor, Inc. and has followed real estate dynamics and the economy for over 30 years. Mr.

Winzer also co-founded First Research, Inc., which follows 250 sectors of the national economy and was acquired by Dun & Bradstreet in 2007. Mr. Winzer is a graduate of MIT with an MBA from Boston University.

62 | think realty magazine :: march 2018

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