Back in March of 2010 I wrote an article for BiggerPockets, Double-Dip Used To Be Fun and Exciting, discussing the prominent view that the housing market was eventually going to head back into declining values. This new (for those who ever believed that things stabilized) property value decline has been affectionately referred to as a “double-dip”.
The focus of the article mentioned above was not to try to predict the timing of a double-dip, but to help you to understand that given the economic situation at the time, there was going to be a double-dip.
And… that seems to be exactly where we are today for most areas of the country. Housing prices which for the most part had been bouncing around on the bottom… have renewed their downward path, taking billions in equity out of the system and further exacerbating the number of under water homeowners.
Over a year ago the overall economy seemed to be on the mend, at least that is the story line we were being feed. But, as 2011 got started it has become obvious that the economy in doing very well and unemployment, the key to housing demand is headed back up.
Everyone needs a place to live… right!
I have been huge proponent of investors paying close attention to their local market, understanding what makes it tic… and then positioning your business to take advantage of the opportunity.
For instance, in many markets selling to homeowners may not be the best strategy. Yet these same markets provide fantastic opportunities for buying and holding properties as rentals, and I would not expect that situation to change in the near future.
OK… Now What?
In my opinion, there are just a few things an investor can do to ensure their profits in our current double-dip scenario.
The first one is make sure you are pursuing the right investment strategy for your market. An example would be, don’t try to sell to homeowners if there aren’t any to sell to. Seems so simple doesn’t it!
The second is this: DON’T OVER PAY! Or put in terms you have heard before, You Profit When You Buy!
Now is not the time to get complacent or spooked by the market. In fact, in most markets the opportunities are only getting better. Your job is to conduct your research, make sure your business is positioned to profit based on that research and then… RUTHLESSLY execute.
Best of Luck!