If it was easy then everybody would be doing it but if you take your time, investigate in great detail and are willing to take a little bit of risk then it is possible to find the new real estate hotspots before the sheep join the party. This is how many people make a significant income from the property market, doing their homework, monitoring local and national markets and being able to project forward and see when the trend is turning.
On the wider picture it is very difficult for any national, or indeed international, real estate market to move too far ahead if the national or worldwide economic outlook is difficult. We saw this in 2008 when the vast majority of real estate markets fell significantly or at best held their own. In this particular situation it would have been difficult for even the most buoyant of local markets to remain steady therefore it was probably a time to avoid real estate. On the other hand, if the economic outlook around the world is steady, there are no major shocks on the horizon then it is time to look further down the food chain.
National real estate markets
In the vast majority of cases you will see many hotspots emerging as a consequence of a buoyant national market. So, in a similar fashion to the economic outlook it is vital to keep a very close eye on national real estate markets and spot those which have potential for the future and are looking to turn upwards.
One particular market which brings to mind is Dubai which for many years was not even on the radar of even the more speculative real estate investors. However, at the turn of the century it became a worldwide hotspot and even in the immediate aftermath of the 2008 worldwide recession it held its own. This is the kind of market where there was significant money to be made on a local level with different areas of the region showing markedly different performances. There did seem to be a general consensus among some of the more buoyant Dubai local real estate markets with expat job opportunities the central focus.
Changing local environment
We can look at Dubai or we can look at different areas of the world but if there are significant changes happening on the ground this can have a material impact on the local real estate market. One example in the UK could be the introduction of a high-speed rail network linking London and Edinburgh with a variety of new stations in between. If you are able to spot the up-and-coming commuter hotspots then there would be potential to make a significant return in the longer term. However, it is worth noting that if you are looking at local events on the ground as and when they have been confirmed then others will have spotted these also.
This is where an element of risk taking comes into play and the ability to balance up the risk reward ratio which is not always easy. Can you imagine if you took a punt on a new railway station on the high-speed rail line before it was confirmed and it actually came off? There would be potential for commuters looking for homes out with some of the larger towns and cities. The introduction of an extension to the existing transport network would increase demand for local housing and potentially push prices to a new level.