Tuesday, November 07, 2006

Adapting to a New Market for New Construction

With the glut of unsold new homes coming on the market, one enterpreneur, Thomas V. Caldwell, is predicting a shift by investors to rentals -- telling the NY Times:
"...But smart investors, he argued, were absorbing the surplus by buying up homes that builders were now unloading at bargain prices — some for as little as $60 to $80 a square foot, which local experts say is barely enough to cover construction costs let alone land expenses.

At such prices and with interest rates still low, an investor can cover his monthly costs, maybe even earn a modest income, by renting homes for $900 to $1,400 a month while the market recovers, Mr. Caldwell noted.

“It is not a get-rich quick scheme,” he acknowledged. “But investments in real estate,” he added, “do go up over time.”

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