German Llanos is the Broker/Owner of 24 Hour Real Estate LLC with offices in Chicago, IL and Miami, FL. He helped over the last 11 years to over 400 clients to buy, sell and lease Real Estate.

TAG: Economy

Timing the market

I wonder why I did not buy Citibank stock when it went down to less than a dollar? Greed or fear? I was there in front of my E-Trade account did my fundamental and technical analysis, did all my home work, knew that the government will not let it die, my gut feeling was saying go for it!, I remember that afternoon… after 2 hours of thinking I stood up of my desk and said: Let’s wait.

You know the rest of the story. I regret that did not do it now. The opportunity is gone.
I have a few clients who asked me: Hey German when do you think the Real Estate market will bottom up? I usually tell them: “On Friday, September 4th, 2009 at 4.02 pm. There will be a huge thunderbult in the skies and the sun will come out shining! You will know exactly then that the recession is over and the prices will start rising after that exact moment”.

Point to make is there is no way to calculate the exact time to buy. You can analyze and then take advantage of a favorable environment. Do your homework, do some research and find out yourself if this is a good moment to do it:

– Interest rates are low. Yes 5% or 6% is not 4% but is less than 18%. Remember or read about Carter and Reagan times. I love the 80’s but I did not love this part.

– Inventories are still at all times high. Foreclosures makes the homes next door to decrease value and there are a lot of those so the prices are still cheap. Since developers are not building now and will not do it for the next 5 years (banks will not finance new projects), chances are that there will be a deficit in years to come when all the inventory dries up.

– Unemployment is at 10%. Not at 25% because that is a depression but with 10% people are “afraid” so there are less buyers out there. So if you are secure financially and confindent you will find less competition and find that great deal.

– Inmigration and a growing population rate is here to stay. In Chicago there is and will be lots of international inmigration and midwest inmigration. Just ask your neighbours in Michigan and Ohio where they kids will go to study or work. Florida will receive plenty of baby boomers and inmigrants from all over the world with the years to come. Location works also to decide what is the city that you will pick to live.

Yesterday we were looking at homes in Brickell with a few clients. The sweet deals, that corner units with that view to the bay at $180K are long gone… the whole tiers. The smart investors are almost done shopping. I am talking about the quiet ones, the ones with experience and money. They never make the news but own the prime properties in all the cities. The ones that buy “value” not fashion or price are buying now. Do you want to look for another “Sign of the Times”?

Have a great Labor Day weekend all!


The recession is over. Find out when you will feel better.

Yep! It was released a few hours ago: the unemployment rate is only 9.4% and it was expected to be 9.6%. The free falling stopped so why aren’t you get a job yet? Or why don’t you have more money than a couple of months ago? Well, it takes some time… companies will not start hiring people like crazy overnight. They will be cautious since most of us learnt a lesson out of this mess. I think all of us will be more carefully from now on. This will determine an slow grow in the near future.

In past recessions the main economy drivers were housing, durables and exports. Internal demand accounted as much as 70% of the economy. Not this time, at least not in the near future. There have been structural changes with this crisis. People and companies will spend and hire much less than in the past. America looks like will become more frugal which I do not think is all a bad thing. Let’s keep ourselves focus and do not be over optimistic. All that I am saying is that it looks like we are not going anymore down. The way up will take a few years. That is my opinion.

Where are the opportunities in Real Estate in this new environment?

1. The “amazing deals” are almost gone so hurry up. Banks became smarter so they are not “writing off” bad loans and getting ride of the house for nothing anymore, now they learnt to “work things out”.

2. Rates are still low. Yes they are. Jimmy Carter was the Obama of the beginning of the 80’s. After his management rates went around 18% for a mortgage so please do not complaint when your loan officer offers you 6% 30 years fixed.

3. Now we have the Commercial Real Estate crisis which is a great opportunity for buyers like you. Because demand is low many retail businesses lost their properties. You can step in buying for cents out of a dollar… same like in residential. Buy mixed use properties, strip malls or whatever good piece you have in mind. Call me to analzyze it together.

Do not unbuckle! This road to recovery will be bumpy but we will be fine long term. Have a great weekend!


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