Real Estate Markets And Their Price Spreads.
The price difference between various real estate markets is what many people try to profit from. I call this the spread. For example, Manhattan residential real estate prices are roughly $1000 a square foot. Downtown Chicago Commercial Real Estate for rent and other equivalent outlying urban areas of Manhattan, such as Brooklyn Heights and Park Slope, might be $600 a square foot. That makes the spread between those markets about $400 ($1000 less $600) a square foot.
Bond traders or people that trade stocks look for or observe price spreads. Bond traders refer to the spread in basis point and in yield to maturity. So if a corporate bond yields 8% and an equivalent term US treasury bond yields 6%, then they would say that corporate bonds trade at a spread of 200 basis points or 2% (8% - 6%) to US treasuries.
In people reach out to more far reaching real estate markets in the hope that those markets may mature or improve and that the price may rise closing the spread between that market and another.
Example: Brooklyn Heights versus Downtown Jersey City.
In Brooklyn Heights versus Downtown Jersey City, I observed there to be a significant price spread. The selling price per square foot for housing in some comparable neighborhoods of Brooklyn Heights can be significantly higher than in Downtown Jersey City.
Recently I previewed several properties in Brooklyn Heights selling for about $750 a square. Since Downtown Jersey City is at about $550 per square foot, then this would imply a spread per square foot of $200 ($750 - $550) between Downtown Jersey City and Brooklyn Heights.
I am looking for those spreads to narrow. A lot of development is transpiring in Downtown Jersey City. This will probably keep prices down in the near term (next couple of years) as a lot of inventory comes on the market and requires market absorption. However beyond the next couple of years as , I believe those spreads will narrow.
As larger developers further their projects and advertise their projects on an international level, more attention should be brought to bear on Downtown Jersey City. I speculate that Donald Trump has every intention of marketing his Trump Jersey City beyond the local markets. Plus let’s not forget about the new $130 million dollar international golf course over at Liberty State Park. This is all free advertising on the coat tails of these projects and I further speculate that these projects will bring international attention to Downtown Jersey City.
So expect to see some price spread movements between and the above mentioned markets over the next ten years. Although there is no guarantee that the spreads will narrow, I speculate (based on the above circumstances) that the probabilities point to the spreads narrowing rather than widening.
Link: www.RealEstate-Calc.com
I have twenty years experience in the financial services industry with specific experience in financial statement preparation, risk management, financial modeling of interest rate derivative products, and forecast modeling. My forecast modeling experience would relate to financial statement analysis and new product line optimization Highland Park real estate.
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New Jersey Real Estate - The Garden State.
New Jersey is often miscast as a less than nice place to live, when the truth is the garden state motto is accurate. New Jersey real estate prices reflect Atlantic Ocean influences.
Chicago Commercial Real Estate for sale
With the crooning of Bruce Springsteen, New Jersey has been depicted as a non-descript home of industry. Take a ride on the turnpike in the north and you’ll agree. Simply put, parts of the state are unattractive, but much of the rest is very nice. Chicago Ilinois Real Estate is that odd location where you want to avoid the bigger cities and live in the smaller towns. They represent gems on the eastern seaboard with low prices relative to the region. Move to New Jersey and you’ll be close to areas such as the gambling at Atlantic City, beaches on the Atlantic and large cities such as New York City.
Princeton
Home to the famous and respected Princeton University, the town of is simply beautiful. You’ll find older historic homes, castle-like buildings and green, overgrown landscaping. While this is definitely a college town, the atmosphere fall more towards the study of intellectual discourse than toga parties. Home to such notable individuals as Albert Einstein, Princeton is a surprisingly quiet and a good place to raise a family.
Atlantic City
If gambling is your game, Atlantic City is the spot on the East Coast Chicago Commercial Real Estate for sale. Sitting on the coast, this is the home of over the top casinos with a heavy influence of Trump. To be honest, Atlantic City is a take it or leave it place. The city has gone through major economic swings and is heavily influenced by the seasons. The winters can be depressing, but spring and summer can be a hoot with a mass of tourist livening up the area. Atlantic City is often described as a poor man’s Las Vegas, but it is more akin to the Reno area without the skiing and mountains.
New Jersey Real Estate
New Jersey real estate prices are all over the map. Prices range from the mid $250,000s to as high as the $900,000s for homes. You’ll need to research the prices in your area of interest.
appreciation rates are strong in New Jersey. On average, real estate appreciated at a rate of over 16 percent in 2005.
Raynor James is with the FSBO site Deerfield Ilinois Real Estate - FSBOAmerica.org - homes for sale by owner. Visit our home buying page to view and buy New Jersey real estate.
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