Never Try to “Time” The Market
For weeks now, based in part on the economic gloom forecast for real estate values from west coast based lenders, we’ve been encouraging our real estate investor clients to wait just a little longer but save your cash and there will be some ‘incredible’ values coming onto the market soon! The inevitable response: How Soon?
Veteran stock investors often say that trying to “time” the stock market is a fools errand. At risk of being foolish about the real estate market I can only say . . . . “wait a little longer” with your warchest of cash before you dive into the purchase market.
While Covid has driven down the number of qualified buyers, and that should make the law of demand and supply work in the favor of the real estate investor, Covid has also caused some “entrenchment mentality” and according to industry sources, inventory is also way down.
Some investors may consider this a “level playing field” in that an OWNER OCCUPANT buyer can always safely bid more for a property than an investor. So if the demand / competition among bidders is mostly Investors, that is a good thing. Our crystal ball tells us that within 90 days (foolish of us to suggest it, I know), inventory may being to increase from foreclosures, short sellers, and savvy sellers. When we have impaired credit caused by job loss AND increased supply caused by prolonged inability to stay current on housing cost installments, THEN IT WILL BE TIME TO GEAR UP THE ACQUISITION CYCLE OF INVESTORS.
The federal government has interfered or perhaps only delayed the cycle by implementing moratoria on certain foreclosures and evictions. Please join us in praying that the Covid crisis eases up and the economy, health, employment of our nation and planet recover as quickly as possible and that our investor clients still find room to prosper and succeed.