I have been selling Real Estate in the “bococa area” for last 7.5 years, I have watched it boom, bust and boom again….if this is cyclical is the bust on the way ? If so when will it arrive ? If it arrives how much of a down turn can we expect or rather anticipate and speculate?
Real Estate is based on few factors, rates , supply and demand and location. I’m sure there are a few other variables that we could throw into the mix but for the moment we can chew on these.
Let’s take a close look at location , we have all heard of the three L’s … And at times we may not have understood what that exactly meant but for most part you assumed it meant higher price, yes that is true it warrants a premium because it saves you quality of life time. Time is the one thing you can’t get back.
Your commute is shorter ,the area amenities are near by, you have access to subway/ bus and rail system, you can walk almost anywhere, bike ride and you don’t need a car. This is what location encompasses, this is what people pay for. They should, it’s like first row seats at a concert or orchestra center stage at a theatre performance or ring side seats at a fight … Get the picture ?
Let’s look at supply and demand – this is when I say “everybody wants what everybody wants” the majority of buyers only want something that someone else is willing to buy because they believe it’s a commodity or a hot item or maybe even just keepin up with the Jone’s … Either way this drives up the demand. Once the rash is visible it begins to spread like poison ivy and people start buying like crazy and this drives up the market. If there is little supply but demand is high we enter bidding wars and over paying, clearly when the demand settles we encounter price drops especially when the supply is still on the high side. Let’s examine what happens when the supply and demand are both on the low side ?
Anyone wish to guess ? Any economists out there ? Gamblers ? ….
Well the market adjusts and keeps adjusting until the inventory starts to move, the prices come down and down , buyers get remorse and or cold feet , deals die and stagger on the market. Home owners play the off and on again game until they hit the number they hope for , this isn’t always the outcome.
Most brokers like stability but we work in a very unstable market. The only constant in Real Estate is change. Brokers like to speculate and assume the fall is going to spike and people come to market then but there are other factors that push real estate.
When we see low demand and low supply we expect a bust to happen and we are not exactly sure when but its coming, what does that mean as long as you didn’t overpay during a high demand period you have nothing to worry about, as long as you don’t have to sell in a bust market you need not think about it, but if you bought in high demand time and must sell due to RATE increases you could lose 20-40 % that is painful ! OUCH !
The last bust was a drop of 20-40% there was a glut of inventory, demand dwindled and no one was buying , rates were fluctuating, banks were losing money, the economy went south and most of the new developments were just hitting the market … Speculators feel 2017 may have this very same effect, because of the new projects coming up and demand is down for the most part. I’m talking about this may- August.
Again anything can change this is the only constant in Real Estate but understand its at the hands of greater powers.
Rates are due to rise this makes people nervous, especially those out there that like to take risk and want adjustable rates… Even a point can make or break a budget. We hear rates are to rise by end of year and continue in an upward fashion this alone generally drives Real Estate down since the monthly salary increase the overall price needs to decrease to keep it all moving.
The beauty about this business is that it’s always in demand, people always need a place to live and people buy / sell whether markets up or down!
It is recession proof. Despite what people may perceive.
Show me when Real Estate came to a halt ? Show me when everyone stopped buying, moving, renting ?
In the history of Real Estate it’s always moving. People are always buying and for most part people are always selling !
Look at it with an objective eye and get in on the low and hold it for years to come!
Any questions ? Need advice ? Want to buy but don’t know how ? Email me already !!
What are you waiting for ? Buy something 🙂
AskImma 
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