For house buyers and investors, 1991 may present the best property bargains in nearly 10 years," according to the December issue of Money magazine.
Money cautions that a surplus of homes and apartments and local economic weakness will continue to depress values well into next year, but cites a projection by the WEFA Group research firm of Bala Cynwyd, Pa., that real estate markets in most areas are likely to bottom out in late 1991, as the oversupply shrinks.
WEFA forecasts that average house prices nationwide will gain 5.8 percent while inflation runs at 6.4 percent. Noting that "the profit outlook for property in 1991 is . . . checkered," Money offers a guide to six real estate investments:
* Single-family homes. "Unless you bought at the very top of the market, you probably have at least broken even and can look forward to modest gains . . . over the next decade," Money says. "For first-time buyers and those hoping to trade up, 1991 will be an excellent year to act."
* Residential rental properties. Rental vacancy rates have dropped to 7 percent, and demand for the dwindling supply of rental property could increase the value of rental buildings by 6 percent to 8 percent a year through 1995.
* Vacation homes. In many regions prices for vacation homes are about 30 percent below the asking prices of 1988. But, John Hawks, Baltimore-based resort property specialist, said that demand for second homes by baby boomers should help push prices up again. * Real estate investment trusts. Money calls REITs "the easiest and least costly way" for small investors to hold real estate.
* Commercial property. "Steer clear of commercial property in 1991," Money advises.
* Raw land. "In a phrase, forget it," Money recommends.