Finding Good Deals In A Transitioning Market

[Ken M.]

Inventory and Days on Market are increasing in several markets.  If yours is still a buyer's market, Bless you and carry on.

However, if your market has become challenging, it only means that "all things old have become new again". Markets cycle, and you have to adjust when things change. This is not new. We've seen it many times in the past.

For the longest number of decades a balanced market took 6 months to sell a house.

That is one reason everybody and his brother were not real estate agents, it took too long to make money. Investors were few and mentors were even fewer. There was no money in it, considering the other ways to make a living. . We are returning to that type of environment.

Let's face it, do you really think going forward every property will appreciate? Lenders provide funds on the ability to repay factored as a debt to income ratio. That is, they require your expenses to be lower than your income, substantially lower. 

With personal debt at all time highs, people's ability to repay, prevents loans for housing going beyond the current level. Watch for Days on Market to go out even further until sellers adjust their prices. That means properties will go down, not up. Buy accordingly.

If the mortgage on your investment property costs more than you can rent it for, you are losing money with no hope of appreciation in the near term. Plus you have the headaches.