Updated over 11 years ago on . Most recent reply
How to forecast the future economy of a market
I have finished reading The ABC's of Real Estate Investing by Ken McElroy. In his book, as well as in the BP podcast he is in, he discusses that the preliminary research of any real estate investment isn't a property, but the surrounding market that a property is located in.
My question is: What resources have you found most helpful in forecasting the future economy of a market or submarket? And, how do you recognize through all the information you may find, the data that really matters?
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To analyse the future of a real estate market...first check your crystal ball for any cracks or dings, then rub vigorously and concentrate. Stand on your head and look into the ball. This will tell you all you never need to know.
Back before the RE market tanked, the National Association of Realtors forecast a continued up market nationwide.
Your best bet is to keep an eye on current market conditions for the trends. I used to invest in Southern California (pre-2006). In June of 2006, for the first time in years I saw some foreclosures come on the market in the Palm Springs market area, and the days on market began to lengthen. I sold my properties (I am a licensed agent and was at the time) and warned my clients of what I was seeing in the market. I knew what types of loans people had been using to purchase properties and that many had refinanced over and over, using the house as a bank account. With this information I figured it was going to be a long hard fall.
Your best bet....know you've got a good deal when you purchase and keep your eyes on the market.