Real estate investing is one of the greatest wealth-building strategies of our time. However, it can get a little frustrating when it’s hard to find good deals in your market.
Real estate markets have gotten very hot (i.e., competitive) in many areas. The media is just starting to catch up to how hot these markets are, and market forces have driven up prices while depleting the inventory for solid investment deals.
Top Three Causes Of Competitive Markets:
1. Demand for real estate investment deals is greater than the supply. There are more people buying than selling investment properties at a discount.
2. Prices have risen so high for on-market properties listed with agents that it leaves very little equity to make a profit. On-market properties listed with agents are the easiest deals to find, which means they will also have the most competition.
3. Properties are being sold for higher than the as-is value. Investors are overpaying for the properties, or owner occupants are buying fixer-uppers and are willing to do the work themselves to get into a home at a lower price.
All of these can cause a seller’s market. This is very typical of East Coast, West Coast and major metropolitan markets, where the real estate market has been increasing for five to 10 years, like we’re seeing right now. We’ll stay in a seller’s market until people are no longer willing to overpay for properties or there is a big economic change, like an interest rate hike or something similar to the mortgage meltdown of 2008.
YOU MAY ALSO LIKE
The real estate market cycle will most likely change when the average middle class worker isn’t…