Real estate inventories are “bouncing along the bottom” now, meaning it’s a good time to invest, as long as you adhere to two key caveats, industry executive Harvey Green told CNBC on Tuesday.
One, as with any investment, conduct your due diligence, and two, know the fundamentals of the asset class you’re considering.
“Everyone pretty much agrees that we’ve reached the bottom [of the primary markets],” Green, CEO and president of Marcus & Millichap Real Estate Investments, said. He added that tertiary markets have yet to drop completely, but that primary markets are now beginning to move up, after the fall. Green did not specify which markets are primary or tertiary.
“Real estate can be a very good investment, but you have to know what you're doing," said Dolly Lenz, vice chairman of Prudential Douglas Elliman Real Estate and one of the country’s top real estate agents.
“Real estate has always been local, completely local to a specific area—in the Hamptons, to an area in New York City itself,” added Lenz. "So if you are market-specific, [before you invest] you have to look at everything within that framework."
Lenz said real estate investors should consider their investments long-term—a minimum of five years. She also recommended buying in markets with strength, such as New York City and the Hamptons, and added that she’s considering Florida property as an investment when prices drop more.
Green recommend buying in established large cities across the United States “where you can add on real estate relatively quickly.”
"The market is beginning to rebound," Green added. "We are seeing tremendous activity in the 'A' product of different types of products—apartment, office, industrial and retail."
As for the buying-versus-renting question for the individual, Lenz said there's no right or wrong answer—it depends of the particulars of a buyer's situation. For her son, a recent college graduate, Lenz thinks it's best that he rent for a few years before considering a purchase.
Those in the best position to buy, said Lenz, are those with cash on hand, as banks are still “being incredibly sticky about borrowing.”
To the question of who has extra money to invest, Lenz added, joking, “You’d be surprised how much money people have in their mattresses these days.”