There are few ways to ensure
your economic future as good as spotting trends, contrasts
and distortions. Last week’s
message looked at the very disturbing trend of the demise
of the American pension.
One area that will gain from this trend is investing in
Small Town USA.
This is because there are some parts of America that are overvalued.
According to a USA Today article
December 9, 2005, a study, by National City, a Cleveland-based
bank and financial information provider,
Global Insight, shows real estate market distortions. The
study examined 299 metro areas that account for 80% of the
single-family home market and found that Naples, Florida
topped the list, with homes 84% overvalued. The rest of the
top five were Merced, Ca. 76.7%; Salinas, Ca. 74.8%; Port
St. Lucie, Fl., 72.2%; and Stockton, Ca., 72.0%.
41 of the 65 significantly overvalued markets were in California
Florida. The report also showed undervalued markets
such as College
Station, Texas, 23% below value, Charleston, S.C., undervalued
by 7%; Charlotte, N.C. 6%; Huntsville, Ala., 11%; and Lafayette,
You can read the entire article at USA TODAY
Here is why we can cash in.
First, look at another trend. One of the largest demographic
history (Baby Boomers) is about to retire.
Second, surveys of Boomers
suggest that a majority plan to move when they retire. A
majority of the movers plan to settle in small towns 25
or 30 miles from where they now live.
Third, other Boomer surveys
show that most Boomers plan to keep working part time when
Fourth, technology now makes it easier than every before
boomers to move to small towns and continue to work part
Fifth, the decline of pensions, Social Security and the
US dollar will
force these boomers to move to less expansive paces and work!
Learn more about Martin County, NC at http://www.visitmartincounty.com/
In other words, invest in
Small Town USA now. Merri
and I have been
harping on this for years and have followed our own advice
by investing in Ashe County, North Carolina. This
seems to have paid off since the farm next to ours is on
for six times what we paid for ours, yet is still half
priced of other surrounding areas.
Another USA Today article tells how Martin County North
(another example) is trying to attract retirees from the
D.C. area. This is part of this county’s economic
recovery plan to
replace 800 jobs lost from 1999 to 2003. The coordinator
of the Martin County Entrepreneurial Assistance Plan says
of the retirees they aim for, "They have a house that
they’ve owned for
at least twenty years and paid $50,000 to $70,000. The sell
the house and it brings $220,000. They come here and buy
the same house for $75,000."
The growth in prices of urban
housing provides one exit for Boomers who no longer need
to be in the city.
You can learn more about investing in Small Town USA at
Until next message, I wish good trends for you!