Maybe a turn in the Market

1 Reply

I have seen a couple of cycles here in San Antonio, but did not really know what was happening until it happened. Now I realize the nature of cycles and can see things a little better now. With rates so low for so long, unemployment rate so low for so long and gas prices so low for so long do you think we are finally at the top of the market?

https://www.dallasnews.com/business/real-estate/20...

https://therivardreport.com/usaa-bank-lays-off-265...

We know rates are moving up. Also, we know that there is a low supply of houses for sale. What I learned from the Dallas News article is that the demand has slowed. Maybe because of higher prices? Maybe people can afford less with higher rates?

I have noticed that the foreclosures have dipped to the lowest level in quite some time, at least in the Texas major cities of San Antonio, Austin, Dallas/Fort Worth and Houston. This seems like another reason that things are at the top. 

What do you think is going to happen in the next 6 months to a year?

As it relates to rental properties.. I think the market will be bracketed by Rents.. if rents do not move up with the asset values.. investors will not pay more for a given cash flow.. So you could see the market for investors looking for SFH take a breather or reach a price ceiling based on rents reaching their top levels that are sustainable. AS for owner occ homes or new construction.. folks buy those on need and emotion.. not on financial return calcs.. its kind of nice to see things leveling off .. so you just need to back into your deals at todays prices.. And of course highly regional … Interest rates make a difference for sure on DTI and how much loan someone can get.. but then we look at the stock market at it just roared up a bunch in the last two weeks..