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Calling a Market Bottom – Is It Now?

Are you one of many would-be home buyers who are sitting back waiting to see when the sliding prices stop, stabilize and turn?  There’s nothing wrong with that, but calling market bottoms in any type of investment is a tough prospect, even for the professionals.  However, if we look at Phillip Blumberg, Blumberg Capital’s CEO, history may be about to repeat itself.

In 2006, Mr. Blumberg began to sell off all of his fund’s real estate assets, citing fundamentals that indicated problems ahead.  He was certainly on the mark, and managed to get out before major damage to his investors.  Well, today he’s telling us that he is bullish for a recovery within the next four years.  He is calling this a bottom and the time to buy, with improvement over the next 3 to 4 years, and an optimal selling window in 4 to 5 years.  Here are some of his reasons: 

  • 290,000 new jobs added in April, 2010.
  • 573,000 jobs added this year, 84% in the private sector.
  • Though unemployment was up from 9.7% to 9.9%, his take is that this is a positive development, with unemployed who had given up now returning to the job market due to new opportunities.
  • Parallels exist to the late 1980s, with the S&L crisis and accounting scandals everywhere.  Improvement was realized about four years later.

Overall, Mr. Blumberg is upbeat enough to start a new fund and begin acquiring real estate assets again right now.  Maybe your time is here as well.

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