While it may seem like real estate values must keep going up, the 2008 recession should be a reminder that what goes up, may eventually come down.  Can looking back at the last real estate crash help you avoid losses in the next one? Here are some tips based on trends from that market correction to help you weather the next one:

Although the housing crisis was widespread, and the market crash and recession ultimately affected both commercial and residential real estate values, some properties were affected less than others. What did those properties have in common?

• Consistency in neighborhood: Properties in uniform areas where all are maintained to the same standards and have comparable value fared better, for both commercial and residential real estate, whereas neighborhoods with outliers, low-value or distressed properties had more problems. For commercial properties, those located in business parks, central downtown areas, or in neighborhoods of the same type of commercial properties did better than those surrounded by myriad different types of properties.
• Urban real estate: As commuting traffic has gotten worse, there has been a shift back to city-living and working, properties in well-maintained neighborhoods closer to the core of major cities and metro areas saw less depreciation and recovered more quickly than properties in more suburban and rural areas. This has been especially true of the Denver area, with businesses moving jobs back into the city center and residents following.
• Less up-and-coming areas: There always seems to be speculation about the next “it” neighborhood, especially towards the end of a market cycle. However, regardless of the hype, these areas tend to be much more volatile and high risk than properties in established areas of a city, so it is important to avoid overinvesting in these areas late in the cycle.

Although there is no way to completely avoid losses in a real estate market correction, paying attention to where your real estate investments are located, and making sure that your investment portfolio is diversified, may help you weather the oncoming storm better this time around.

If you think you have a good investment property that needs private capital  bridge  financing, contact Montegra at 303-377-4181 or loans@montegra.com for more information about our private capital loan programs. Montegra has been financing private capital commercial investments in the Denver metro area and Colorado front range region for 48 consecutive years.