Post Election Real Estate Outlook: Perfect For House Flippers?
Now that the presidential election seems mostly over, what does the outlook for the US real estate market look like? Has the recent vote created the ideal conditions for house flippers?
The K Shaped Market
The second half of 2020 seemed to bring what many are calling a K shaped market or economic recovery. Billionaires added more than 30% to their wealth in just a matter of months thanks to the crisis. A few well positioned companies have thrived on the recent chaos and shifts. Many other parts of the economy seemed to be struggling, with the future of millions of jobs in question.
With such a close presidential election we also have two very different perceptions of where the economy and real estate market is headed. Perhaps for the first time in recent history, the country will be split down the middle in what it expects the market to do, and what they need to do to survive and thrive over the next few months to four years.
Panic & Distress
The 50% or so of the country which didn’t vote for the president-elect are not very optimistic about the economy or property market. They are cringing. They are bracing for new lock downs, rising interest rates, and the end of tax benefits for long term holding of any assets like real estate. They don’t anticipate any healthy economic growth, or jobs.
Those in this bucket can be expected to be trying to liquidate any existing real estate assets. They want out before new taxes arrive and values fall too far from recent peaks. The best advantages will probably go to those who can exit before the end of the year.
With calls from the president elect’s advisors to institute a new national lockdown, millions more may move away from dense urban cities to find more freedom and space.
High On Optimism & Exuberance
Of course, the other close to 50% of the country must have cast their votes believing their new president will be great for their bank accounts and property values.
This euphoria of winning should be spurring great financial confidence and a buying spree. Aside from the usual sprint transactions as those working in politics move, many should be upgrading their homes, and buying up as much investment property as they can, expecting today’s prices to prove cheap compared to the lift they will get over the years ahead.
Work The Middle
So, on one hand we have both very real and even more perceived distress in the housing market. Then the other half of the population ought to be extremely bullish and active. These are the perfect conditions for real estate wholesalers and house flippers. It may be the most split our market has been between bulls and bears in recent history. You have both motivated sellers and optimistic buyers.
Real estate investors stand to benefit a lot from working the middle of this equation, and there is still easy access to financing for real estate wholesalers.
Just make sure you really know your end buyer market. Don’t assume. Presell those deals and know what the market will really bear in terms of pricing and terms before you get tied up in contracts and inventory.
