Are we at the end of a Market Cycle ?

9 Replies

By no means should this question be deemed as a deterrent for investing in Real Estate, as ideally you would buy below market value and avoid being upside down during a crash.

This question is sometimes area specific, but I’m curious to hear everyone’s opinion. Have prices rapidly inflated in your area? Any signs of the bubble popping in the near future?

Can anyone who took advantage of the last collapse in 2007-2009 share insights/ strategies implemented to make the most of it?

more like a plateau  instead of raising price every quarter or half a year .. prices remain stable.. this is a good thing.

@Jay Hinrichs I’m with you on this. I don’t see ya in a bubble, which my understanding is an externally forced market inflation. The market we are in is caused by high demand low supply plus some other things like low rates and such. Rates are starting to raise which may start to slow buyers thus lowering demand.... maybe. Unless something crazy happens I don’t see a crash because we are low inventory of foreclosures and reo comparatively and job markets are generally in good condition. Though I’m not a market expert so take my words for what they just my opinion.
Originally posted by @Seth Parmelee :
@Jay Hinrichs I’m with you on this. I don’t see ya in a bubble, which my understanding is an externally forced market inflation. The market we are in is caused by high demand low supply plus some other things like low rates and such. Rates are starting to raise which may start to slow buyers thus lowering demand.... maybe. Unless something crazy happens I don’t see a crash because we are low inventory of foreclosures and reo comparatively and job markets are generally in good condition. Though I’m not a market expert so take my words for what they just my opinion.

Bruce Norris says that to be in a true bubble burst you need 1/3 of the inventory on MLS to be foreclsoures or short sales.. this simply is not happening. and it would take a while for that to gain steam.. he did say though he thought MF is frothy what ever that means.

@Jay Hinrichs if I understand it right I think rents are rising to the point to where they are becoming unaffordable. Or maybe it’s because rent isn’t rising high enough commensurate with housing costs? Something like that. I do know that it seems to be getting to he point where many people are being priced out of either market.

@Seth Parmelee   were MF is weak for instance is here in PDX in certain areas..  NEW construction.. it takes about 3 years from start to finish.. build cost went up from the original proformas and rents have not gone up and have actually gone down on the HIGH end new stuff.. so there is some weakness and of course no one does these deals without max leverage so not a lot of room for errors.

@Jay Hinrichs I agree but I also think we could take a hit on price in certain areas.  If for instance the amount of foreclosures did go up we could see some what of a dip.

I too don't think it will be as bad as last 2007 dip then 2008-2009 Crash because of the amount of real equity (Cash) in this market compared to 10 years ago.  A lot of properties locally in Califonria have 50-100% equity right now.  It's not like the last time where there were so many with only 0-20% equity. 

That being said there will be more opportunity at some point--if for instance the trade war gets real, and there's an increase in cost of construction, or if there was a big recession and real people lost real jobs and that led to foreclosures.

I just think we're in a lot better economic shape then the last time.

But history does repeat itself and there could very well be a 10-20% correction in a lot of overpriced markets.

There's a lot of apartments and rentals that just don't cash flow trading at 15-20 GRMs