DESPITE THE NEWS… KEEP WAITING FOR REAL ESTATE DISTRESS…

[Sean Kelly-Rand]

Redfin reports the value of US residential real estate has fallen $2.3 Trillion in the last two quarters…

And Columbia Trust (Pimco) is defaulting on office assets in major cities.

Let’s be clear though; defaults and falls in nominal values do not directly translate into buying opportunities. It will take years to work out the office defaults before a sale at a distressed value occurs. And most owners of residential properties aren’t willing to sell at today’s market clearing values. And, imho, in the non-boom towns (Boston included) it will take even longer to play out.

So despite the desire I don’t see most investors (myself included) jumping back in just yet.

Hunkering down for the long haul here at RD Advisors with the continued focus on capital preservation and yield generation through short-term private credit.

Thoughts?

[Nicole Heasley Beitenman]

I would prefer to buy in a high-rate environment. I don't care to fight 40 people for the same house because everyone waited for rates to drop. Playing the waiting game often costs you more than you save on the deal later on. So if a deal comes across my desk and the numbers work as it is, I'm not going to wait for market conditions that may or may not ever happen. But I also won't buy a bad deal just to say I bought something.