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William C.
  • Real Estate Agent
  • Souderton, PA
414
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591
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The market downturn is here, at least in my market. Anyone else?

William C.
  • Real Estate Agent
  • Souderton, PA
Posted Mar 22 2019, 09:01

It's here. The shift is upon us. Whether a crash is to follow, I am not sure, but the rising tide that we have all been riding for the last 9 nears to reaching it's tipping point. I seriously have no more time to write a post because I have to head out the door to tour 5 properties my buyer wants to see today. Here's what I know. We have been scouring the market for buy and hold and fix and flip since his last project closed about 6 months ago. Sure, we have seen the base hit here, and maybe another single over there. But nothing we were seeing was a solid, double, or triple, let alone the thought of a homerun. For a little perspective, he likes to NET about $40-50k on flips, assuming about $200-250k total investment. Buy and holds he looks for 15% COC, and or about $400/door depending on the project, cash needed, etc etc. Right now he has 5, count them FIVE deals on the table to choose from. All ranging from a 'double' to 'home runs'. Flips looking to net around 40k would be a double, 100k a home run. AND, to make matters worse, we have 5 more to look at today, which all look like solid deals on paper and in photos. So we went from not being able to find a single property that would NET more than $15-20k on a flip, and in the matter of WEEKS at least 5 screaming deals have hit the market, still have not sold, and more seem to be hitting the market daily as we can't even get into them all fast enough to run the reno budgets.

Sure, this is  just my anecdotal evidence.  I promise to bring more facts to the discussion to support me claim, I just don't have the time right now with all this opportunity.  I find it extremely hard to believe all the investors in my market, the greater Philadelphia area, have just pick up and quit buying up deals for the month and left them all behind for us.  I think the shift is here.   The question now becomes, do prices level off and allow buyers to catch up that have been struggling to find a place, or does it swing all the way in the other direction and we see prices actually start to drop.

I welcome those that agree, but even moreso those that disagree.  Please change my mind please try to find some signs that are not pointing to a complete meltdown.   I'm going to leave everyone with one fact that will solidify my case.  Jumbo Mortgages are down 12% by volume compared to last year.  That's a huge drop.  And anyone that has seen this before, the top of the market starts to slow first, and it trickles it way all the way down the the $30k single family homes in Detrioit.  I wish everyone the best.  This is going to be an extremely exciting time for those that have been preparing for it. 

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