The aftermath of the real estate market crash. Is it over? Time to get back in or has all the opportunity in the real estate market passed?
This week during the course of perusing the internets, we came across this article that posed a timely question for persons actively involved in real estate – investors and retail participants alike.
‘Has the Housing Market’s Recovery Finally Ended?’ is a great question. An even better question is what does the “end of recovery” for the real estate market mean to investors.
Even though we don’t know all the answers just yet, a few things are clear.
One of the primary indicators of the relative health of a real estate market are the number of housing sales. Completed transactions offer truth where buyer sentiment may just be speculation. The number of sales tells very clearly the number of deals done.
Still, we must look at closed transactions with a grain of salt because there are a number of factors that influence a sale. Factors such as the availability of financing, competition in the real estate market and perceived job security for would-be buyers all play a substantial role in getting to the closing table.
April 2016 was a record month. The real estate market closed more than 6 million transactions. For a bit of context, at the height of the real estate boom in 2005, over 8.58 million sales occurred. As the article referenced states, the 6 million sale mark is closer to the 1999-2001 timeframe. This is thought to be reflective of a normal real estate market.
Housing sales are now reflective of a normal real estate market
Some may say it’s been so long that we have forgotten what normal looks like!
One thing that is particularly relevant for investors is that the number of foreclosed properties is on the decline. Think Realty cited a reduced number of said “zombie foreclosures” on the market.
There are fewer foreclosures on the current real estate market
This means that foreclosed properties where the current/previous owner has already vacated the property in down.
Maybe that’s because people aren’t getting kicked out of their houses anymore.
We did a realtor.com search just to see what foreclosed multifamilies are for sale in our local market.
Things are a changing indeed.
The real estate market ain’t what it used to be.
And we’re not just talking about for investors. Builders are experiencing their own real estate woes.
You see, in the downturn, about one-forth of construction workers lost their jobs. That means that your framers, drywalls and HVAC guys had to find other work.
Bad news bears.
This means that there are fewer guys out there that (1) have the expertise and (2) are available to put it into practice.
It’s now hard for builders to find laborers at prices they can afford. Which does what?
Bueller….? (yup…we’re 80s babies)
It drives home prices up. Ouch!
People may still be feeling the burn from the last time prices were on the rise. Increased labor costs are not doing them any favors this time around.
All this data is great, but let’s get to what inquiring minds really want to know: Do opportunities still exist for the would-be real estate investor?
*If you look really hard and are really patient, maybe.
Sorry, that’s the best we can do right now.
In our local real estate market, Columbus OH, prices seem to be inflated. We are on the lookout for properties that fit our investing criteria but they have been few and far between in 2016.
Ooh! That rhymes.
Look out for our mixed tape.
In all seriousness, there is always a deal to be had. Real estate fundamentally is a relationship business. If you are in the right place (physical or mental) at the right time and are prepared (read: have $$) anything is possible.
Keep your eyes open for opportunity.