Letter From The Editor: The Wheel of Fortune
March 1, 2005
Hang around a car buff long enough and you’ll have a conversation about Road
& Track classifieds from the 1960s and ’70s, how “used” Ferrari GTOs were
advertised for paltry figures such as $7,000; now defined as “classics,” the
cars fetch millions at auction. These glimpses into opportunities lost
inevitably inspire thoughts of shoulda, woulda, coulda. The same is true of real
estate. In the early 1960s, a relative of mine considered buying a waterfront
house built atop a low, craggy bluff in Newport Beach, Calif. Its main
attraction was an expansive 90-foot-long living room positioned right above the
surf, but its price of $150,000 was not an insubstantial sum. He decided against
making the purchase, which is unfortunate, as the house would sell for several
million dollars today. No doubt you have been in a similar situation;
congratulations if you did buy the place.
Is it possible that we will look
back on 2005 as an era of relative bargains? Conventional wisdom says that we
are near the top of the real estate market, that factors such as rising interest
rates will slow the exponentially compounding home values we’ve seen in the last
few years. But in Home Sweet Home, Bob Morris examines markets around the United States
that have the potential for continued gains. New York and Los Angeles
predictably make the cut, but so do some wild cards such as the Carolina
Corridor and Florida’s Orlando-Tampa region.
Or perhaps it will be returns on
Canadian investments that provide cocktail party anecdotes in the coming
decades. Samantha Brooks examines Hollywood’s discovery of Vancouver, Montreal
and Toronto on page 46 and says many Americans are learning what directors and
producers already know: You not only get more for your money in Canada, you get
it with a favorable exchange rate.
I hope whoever bought those Ferraris 40
years ago enjoyed their $7,000 used cars, with their meteoric rise in value
coming as an unexpected—and welcome—perk. In the same way, I hope you love the
house you live in. And should the wheel of fortune reward you with equity beyond
your wildest expectations, so much the better.
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