Market Update: What's Good, What's Bad?

Hey ,

Days on market increasing...the sky is falling somewhere!

In some markets right now, Single Family Homes (SFH) are doing well in sellers’ markets, yet elsewhere, experiencing buyers’ markets…

What’s good? What’s bad? Where is this happening with Multi-Family (MF) and other assets?

Inside the Trenches

My friend Dave Meyers just posted a US map showing the CDOM (Continuous Days on Market) increases and decreases throughout the entire US between June 2021 and June 2024. (Source: Resiclub Lance Lambert)

When looking at this map, it’s so easy to say, "Oh crap! Run away from the orange and red, and run towards to blue!" Especially if you are a house flipper...

It’s interesting to see how many markets though are still holding up, and it is safe to say that the darker the blue, the more likely you're looking at a sellers market.

If you are a value-add investor and are in one of those markets, I am sure you are either reaping the rewards when listing a property to sell...or you are finding it harder to find "good deals."

So, should we be running away from the orange/red markets and towards the sellers’ markets?

Once again...it depends! The longer I’m in this business, the more I realize how short sighted I have been when playing this investment game.

Since 2020, so many of us have been caught up in appreciation, short CDOM's, multiple offers, cheap rates, and so many other fun things!

As I have said before, this is not normal.

When it happens, we must take advantage of it. However, playing long term always favors the real estate investor more than playing the short term.

Look at Multi-Family properties right now — across the nation in EVERY MARKET, MF property owners have lost values in their properties DRAMATICALLY! Some market values have been cut in half since 2021, and most have seen a large dip in their values.

Was it a great time to sell MF value-add properties between 2020 and beginning of 2022? Heck yes!

In hindsight, was it a great time to buy? Maybe not...

But wait!

If we had a map like this back in 2021 for MF, would we be running towards the dark blue as investors, knowing what we know now?

Is this the same as SFH investing? Not necessarily — values with SFH are far more directly impacted by Supply and Demand than it is by interest rates alone.

Yet there is a lesson here for sure…

• Sellers markets are great to sell in, hard to buy in.
  

• Buyers markets are great to buy in, hard to sell in.
  

• If everyone is doing it, and making money looks easy...it probably isn't the right strategy long term...

Paying attention to trends, market data, paths of progress, are all important to watch, no matter what market you are in.

Short-term expensive capital has a purpose, but must be coupled with a solid investment plan and operations for the long run...and worst case scenario...

Keep your cash for rainy days, because they always come.

Solid operations and long term strategic planning wins in the long term.

Ideally...

Buy in a buyers market, preferably one with a foundation of solid economics if possible, and hold that asset until it one days becomes a sellers market...then 1031 that asset into something better!

So how do you stay on top of things like this?

Who do you bounce ideas, concerns, plans off of?

What peers do you have in your life that you can call and discuss investments with and how to take advantage of the current market?

Where do you go and who do you reach out to?

All of this is absolutely one of the top reasons that Ken McElroy and I created the Limitless Expo.

WE wanted to surround ourselves with people that are actually In The Trenches and getting after it in todays market.

WE wanted to find where to get the best information, data, and experts.

WE wanted to learn.

Just like you.

This year’s Limitless Expo is full of experts, active investors, seasoned pro's getting after it. No selling from the stage — just pure content and networking.

It’s the event that Ken and I would pay to go to so that’s how we created it to be.

Announcements

This week ticket prices go up and we are less than 30 days away from it kicking off in Dallas this year.

Yes! It’s labor day weekend — that's why we are hosting it at the Gaylord Texan. Bring your families and have them enjoy the resort while you're networking with peers.

Use code TARL10 at checkout or click here and get 10% off before prices increase in a couple days.

See you there!

Tarl