Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
The volatility index has been astonishingly low. Obviously that's my opinion. I for one don't think the 'to infinity and beyond' market can continue forever. This stock market, and the real estate markets in many midsize metros (e.g. Raleigh NC market) that I follow really need a break. They have for a while.
While I don't wish ill on any investor, a prolonged correction to end this aged bull market cycle would be very welcoming to me. Maybe we have the start. Market technicians may argue the applicability on a failed cup/handle pattern on an index, but it's the symbolism that it conveys that strikes me. A gapped multi-percentage point drop on big volume from an inflection point... that has makings for some investors to pause and look around. Maybe we are now beyond the (intermediate term) infinity;)
@Chris Martin What do you think are the key leading indicators to predict a shift in the market? I think one of the questions is, how long will banks and government entities remember and be stung by the crisis in '08? Memories fade. Interest rates jumping up a bit will obviously impact mortgage payments, and push more would-be buyers either to lower price point homes or to be renters. In the Triangle, it's tough to see the homes priced below median price points not having tremendous activity any time soon.
Homeownership rates are historically very low. If the trend continues that means more people are living in rented places (apartments, rental houses, etc.) I think the demand for rentals in the triangle (and seems to me, most urban areas) will persist for some time. The question becomes at what price points? New housing stock is part of the equation. As is population growth. The still point to strong potential future growth.
Not unlike anywhere else, disruptions in employment could have an impact (like the 2001-02 tech crash that hit the area harder than most areas). But I don't see this on the horizon in the triangle. Well located, below the median price SFR seems to be a good play, IMO. That's where I and my company are focused. Over the past 3 years, we exited the condo and townhouse markets in the triangle and are focusing on small (8 to 48 unit) apartments in other, second tier cities for cash flow, not appreciation, reasons.