The 3 Types Of Real Estate Markets For Wholesalers In 2019
The housing market is changing. What types of markets are available for real estate wholesalers to operate in now?
All real estate is local. It’s foolish to ignore national housing market trends as they eventually seem to make their way around the country and world in a wave. Yet, what’s happening in New York City one quarter can be very different to what’s happening in the suburbs of Indianapolis at the same time. So, what’s happening out there? What are your options?
Declining Markets
Some US real estate markets are declining. Like the stock market, some will over correct and dive a lot faster and deeper than expected. Some have been in decline mode for over a year. Look at Manhattan’s retail market and luxury condo market. Units are empty, they aren’t selling. Prices have been dropped, and buyers are still negotiating under asking prices.
Many real estate investors have been waiting decades for this moment. They are excited about better prices. Especially ones that return to affordability and price to rent ratios that make real sense.
You can still wholesale in a down market, just make sure you are pricing in the decline and lack of mortgage financing on the flip side.
Fast Rising Markets
When markets start to fail people go elsewhere. Especially investors who rely on a consistent high volume of deals for their income. So, they move from the markets that have peaked to more affordable ones that are still growing. Where prices have been more affordable, there can be more room for growth. Prices may be lower, and the overall trend will catch up with them, but there is the chance to ride the unicorn if you are willing to move, and fast.
Static Markets
Then there are some real estate markets which are far more stable. They may not go up much when things are good, but they fall less when the rest of the country is diving into a crisis. They are more static, but they can offer good opportunities for wholesalers who help distressed homeowners, or can seize on value add opportunities.
Summary
The market is changing. It’s always changing. You may love the direction of your local market, or not. You can ride it out and adjust your offers and exit strategies. Or diversify into multiple markets to keep your income steady, and benefit from all the ups and downs. Or hop from market to market to fit your model. Historical data provides a lot of clues as to how low prices can go, how high they will bounce after hitting bottom, and which markets will be affected next. It may not be happening exactly the same, but you’ll see the patterns if you look.
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