Which Buyers Are Still Spending Big In This Economy?
Some media outlets have proclaimed that home buying activity has tanked by 25% over the past couple of months. So, if you are a real estate investor relying on consistently doing deals, who is still buying?
The Wealthy
The luxury end of the market still seems to have its share of big buyers. If you are Jeff Bezos, even if your company has lost $10B this year, picking up a new vacation home for $100M is still like spare change.
There may be more celebrities and CEOs falling into distress. Yet, there are just as many happy to splurge on new properties.
Tech Businesses
Some of today’s biggest real estate buyers are tech businesses.
While many older companies are making big layoffs, and are losing billions, others are just starting to scale, and have hundreds of millions of dollars in capital to spend.
One of them is Origin Materials which is building its first plant in Canada for $100M, followed by a second in Louisiana for $1B, spread across 150 acres.
This is a great opportunity to diversify your business, and flip big commercial properties.
Remote Workers
San Francisco is concerned that it is going to lose $200M in property tax revenues as the city empties out, and office vacancies head toward 30% or more. Similar trends are expected to be happening in NYC, and other former business hubs.
Those workers may not be able to afford to continue to live in those cities, nor want to as the quality of life has fallen off a cliff.
But, they need to live somewhere. Which often means buyers flush with cash to buy in more affordable destinations.
Also keep in mind that tax refund season is coming up. Meaning even low end workers may soon be flush with down payment money, and may see buying as more appealing than suffering under extremely high rents.
Investment Funds
Investment funds are still active. They rely on doing new deals to be able to raise money and keep the cash flow coming in. Some will be pickier about the returns and prices they pay than others. Though, these are both bulk buyers of single family homes, as well as multifamily apartment buildings.
The end buyers are still out there. You just need to know who they are, and make the right connections, with the right marketing.
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