Great Real Estate Plays

by: Brian.Brady on October 09, 2007 21:37:23 Leave a comment »

I posted about nine "special" real estate markets. These markets are, in my opinion, somewhat impervious to the fluctuations of the real estate markets where us mere mortals live. Basically, the affordability factor doesn't apply here. These markets are so desireable that the wealthy will just pay cash to live there.

Here are my choices:

The Absolutely Best: The Big Apple; Midtown Manhattan. Is New York beautiful? Well, that truly is in the eye of the beholder. I don't think it is any natural wonder but it is a wonder of man's doing. Manhattan is the epicenter of the world. Does it fluctuate? Sure, a bit because the Wall Street factor is such a huge influence here. Make no mistake about it...young people should live in Manhattan...old people should live in Manhattan...EVERYONE should live there once in their life. Midtown Manhattan real estate will always be a good bet over a five year period.

The Old Guard: These are known for two things: Natural beauty and proximity to a big city while retaining a small village feel. "Old Money" towns are what you might think of when you think of these markets. They are mature, built out, and very pricey. I believe you will always make money if you buy and hold for 5-7 years in these towns. Listed, in no particular order:

La Jolla, CA
Newport Beach, CA
Santa Barbara, CA
Malibu, CA
South Marin County, CA
Bainbridge Island, WA
Greenwich, CT
Lincoln Park, Chicago, IL
North Shore, Long Island, NY
Upper Saddle River, NJ
The Main Line, Philadelphia Suburbs
Aspen, CO
Sanibel Island, FL
Siesta Key, FL
Naples/Marco Island, FL
Amelia Island, FL
Hilton Head, SC
Rancho Santa Fe, CA
Moorestown, NJ
Santa Fe, NM
Palm Springs, CA
Alexandria, VA
South Bay, Los Angeles, CA

The New Chic: These are three markets that I believe have capitalized on making their hipness so irresistable that they will be a cross between New York and The Old Guard. The rich and famous want to live there and they are buiding or "rebuilding" like crazy. I believe that you can buy property in these markets and hold it for ten years and make a lot of money.

The Strip, Las Vegas, NV- Vegas tried to market itself to families in the 90s...BAD MOVE! Vegas is so..sinfully decadent and hedonistic. The Strip is fast becoming the party playground for the rich and famous of the world. The edifices reaching to the sky, the condotels are what I believe to be the next wave in high end real estate. The affordabilty factor matters a bit right now but time will prove that"betting with the house" is always the way to go...Buy a luxury condo on the Strip...you'll sell it in ten years to an aging rapper for 2-3 times what you paid. N.B.- I have made a grave mistake about property-type. Renee Burrows made an excellent comment with a follow up post describing why a condotel is a bad investment for now. I maintain that the Vegas Strip is a great buy but implore readers to consult a local Vegas real estate pro about the property type that would appeal to the rich and famous of 2020. See comments 4, 8 and 9 of this post.
South Beach, Miami (SOBE)-What Vegas is to West Coast celebrity, SOBE is to East Coast celebrity meets Latin America wealth. The "vibe" in SOBE is fun, young, hot, and very hip. The people are beautiful, the restaurants are beautiful, the new buildings are beautiful, the beach and water are beautiful. Buy property here and you'll sell it for twice as much money in ten years to an exiled Latin American politician, a retired 35 year old Wall Streeter, or an internet billionaire.
Old Towne Scottsdale is going through a magnificent rebirth with the condo craze. What used to be The West's Most Western Town, a colony for the wealthy with emphyzema and quirky artists has become trendy. The demographics are right for a resilient market. A bit less expensive than the other two, celebrities are flocking to Olde Towne Scottsdale for its fantastic weather, great shopping, and proximity to a big city.

The Musical Chairs: These two markets are carving out a niche that I think will prove itself over a 15 year period. One had it and is building upon its "coolness", the other has created it our of thin air. Both are centrally located in the country so trips to money centers will be easy as well as visits to relatives.

Austin, TX- Yes, as much as I think Texas is a bad investment for out-of-staters, I think Austin will be the epicenter of Texas and the gateway to the Southwest. Austin has always been known for its music scene and eclectic population. As the state capitol and home to the second largest university in the country, Austin is so not Texas while so very Texas. I think that if the downtown rebirth continues, Austin can build on its physical beauty, great weather, recreational opportuntities, and central location.
Branson, MO- I worry about the plentiful availability of land in Branson but I am told that Branson "proper" is practically built out. I believe this will be the city that sprung out of thin air that built itself on a musical tradition. The beauty of the Ozarks, the country music scene, and temperate weather makes Branson my new resilient pick for the next 15 years.

The Long Shot- The Garden District in New Orleans (NOLA) has fabulous architecture, a rich history, and a bright rebirth ahead. I think The Garden District will once again be the epitome of Southern gentility and can be a great 20 year hold. The risks are the disaster and the politics that follow it. Call this one a hunch but I think that wealth will clamor to this little enclave and The South will "rise again" in NOLA Garden District.

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