Business Opportunities

With the uncertainties of the markets these days, it's hard to find an investment that won't lose half of it's value by the next day. So where can you put all that hard-earned money?

One possibility is in business opportunities from gas stations to restaurants, to liquor stores. Some of these opportunities are more hands on than others; but some do offer an absentee ownership possibility.

The pros of owning a business opportunity is the reliable stream of income from meeting the daily needs of customers for such basic products as gas, and food. While these businesses aren't glamorous as being a business executive, it's a nice feeling to know that there's money coming in the bank!

Slow growth may cause additional credit tightening.

Slowing economic growth and weak labor markets may prompt banks to reduce lending to consumers and to companies, according to comments from Richmond Federal Reserve Bank President Jeffrey Lacker. "The deterioration of economic conditions is playing a more prominent role in the tightening of credit terms right now than the direct effects of financial market turbulence," Lacker said in a speech on Monday. Lacker said that the Fed may have left rates to low for too long in 2003-2004, and probably provided cause for lenders to take too many risks. "As a recovery begins, the path of least resistance is often to hold the policy rate at a low level until it is completely clear that recuperation is complete," he said. "It is crucial that we not allow expectations of future inflation to ratchet higher during this recession." Maybe this time around they’ll get it right.

In Denial: Zillow Q3 report shows homeowners imagine stable home values

Zillow, which provides home value data online, released its Q3 Homeowner Confidence Survey last week, which showed that half of U.S. homeowners think their homes are worth essentially the same amount as they were one year ago. Amazingly, the study was conducted October 7-9, the same week that the stock market was completely in flames, indicating most survey respondents were either drunk or in serious denial. Zillow’s own value data shows that 74% of homes lost value over the same period. Perhaps mistakenly referring to property owned on a different planet, 32% of respondents actually felt homeowners actually think the value of their homes has increased, and another 17% percent feel that their home's value has not changed. Homeowners actually are consistent in their continued optimism, though the data shows some erosion. The Q2 study showed that 62% of respondents felt their home’s value had increased or stayed the same. In the West, homeowners were more realistic, with 65% saying their home’s value had declined and only 13% saying it had increased. Looking forward, 40% saw a decrease coming in the next 6 months, with 21% seeing an increase coming. When asked about their neighbor’s homes, people got realistic: 57% thought their neighbors’ homes would decline in the next 6 months, with only 18% saying their neighbor’s house would probably increase in value.

Buy Now or Wait Longer

Seasonally, the winter is one of the best times to get at a discount especially in the locations that are still in high demand - eg. Palo Alto, Mountain View, Cupertino, San Francisco, etc.
Given all the economic turmoil, and bad news, these cities seem unscathed by the economic markets, and have really bucked the trend.

With the holidays and the overall market being depressed, this may be that perfect window of opportunity for those who have waited long to enter these real estate markets.

What about other neighborhoods where Short Sales, and Foreclosures are more abundant?

Well, the motivation is definitely there, and the desire to close out deals by the end of the year, could offer a slightly better opportunity for the bargain hunter.

Though this real estate market is different from recent years past, I still think there will be an uptick of home sales come mid-January when many buyers arise from their holiday slumbers.

Homebuyers, Start your Engines!