Black Friday for Real Estate Came Early…Luckily for you, it’s still on sale!

Black Friday can be amazing and actually save you a lot of money…My wife and I (ok, my wife) is finished with all of the Christmas shopping by the end of this weekend usually and it remains to be seen if we actually “save” any money by being suckered into all of these “deals.”

Speaking of Christmas shopping, here are a few fun facts:

1. If you and your spouse are arguing about how much is the right amount to spend for Christmas, the rule of thumb is that you should not spend more than 1% of your annual salary for the year.
2. Over 25% of Americans are still paying off their Christmas from LAST year!* I guess 25% of Americans went over that 1% rule.

Want to know a rule of thumb for this time of year in real estate?

The most leverage you will ever have as a buyer is during the months of October – January. Just think about what the masses are doing during this time of year (especially in 2023 with rates at 7.5%)

The majority of investors are mom and pops that buy a couple of flips a year and sell in the summer months. Activity more than doubles during that time of year. This means you are competing with 2-3x the number of people and prices go up on average 10-15% and then come back down 5-10% in the winter months. 

Then when you think about sellers, very few want to sell during the Holiday season…Only those that are pretty darn motivated and are not flexible with their timeline for moving sell this time of year.

---

Let’s dive into why you should buy an investment property in the next month or two:

1. Inventory has RISEN 6% this month. That is rare to see in the fall since most activity occurs during the spring & summer months and inventory falls in the winter but homes are sitting on the market longer which is driving up inventory. (keep in mind we are at historically low numbers of inventory so just about any small increase will be noticeable).
2. Sellers are much more willing to negotiate on terms and pricing the fewer showings they get and the longer their homes sit on the market. For example, we purchased a home on the MLS recently for 36% OFF sticker price! A week before that we bought another for 22% off. These sales can save you $25,000 – $50,000! (How much did you shave off those headphones at Best Buy on Black Friday again?)
3. LEVERAGE ebbs and flows quickly in the market. We have had multiple sellers come back to us in the past 3 weeks after realizing the vast majority of buyers have decided to sit things out for the Holidays or until rates come down. Being one of the few active buyers in the market, we hold the cards.
4. In a slow market with few buyers, now more than ever you should be making a lot of insulting lowball offers. The kind of pricing that their agents get red in the face but have to present to the sellers and they immediately say absolutely not!!! Then a day later it becomes, well what if we countered at this price? Gotcha! Remember, you just need one out of let’s say 25 offers to say yes…Real Estate Investing is a number game.
5. Redfin just reported a record 17% of contracts FELL THROUGH last month! Buyers are coming to the closing table and after looking at their payment, they are getting cold feet. Oftentimes these sellers are relying on the sale of their home to afford a downpayment on their new home. When this happens, any guesses for who they call next? 

Put Simply: We are experiencing at this very moment a small window of opportunity that could close quickly. The rates went from 8.1% to 7.4% in a WEEK…If we get below 7%… watch out!

Analyzing Data and Market Trends

I spend the entire year analyzing the data, watching trends, and most importantly, I am looking at the forward-looking data trends for housing. Not only that, we are actively buying and selling every single week which helps us to keep our fingers on the pulse and relay that information to all of you.

It goes without saying that I could be absolutely dead wrong on my 2024 forecast (which is what makes these predictions exciting)

However, I will say this. Most economists are only looking at the data and spreadsheets and are not actively investing their own capital on a weekly basis like we are. This is my issue with professors in business at colleges who have never owned or operated a business. Real-world experience always trumps book smarts.

Then we have the YouTubers out there who make good money baiting people into clicking on their doomsday scenarios (which by the way speaking of being wrong…Man they are running out of excuses for why they are wrong year after year after year about the housing market)…Had they taken the time to read the data and begin to compare to other recessionary periods in real estate, none of them would have made those predictions. 

In the podcast, I go into detail explaining the difference between transaction volume (which will absolutely be depressed for the next several years like it has been the past couple of years) and prices. (It seems to be much more stickier at the current levels than anyone predicted).

I talk about the relationship between the 10-year treasury and the 30-year mortgage rate and how since the 1970’s they have been dancing in tandem. 

We go over the implications of rates remaining where they are now and what the data tells us will happen when rates go up or down.

My hope honestly in doing the show is to educate and help others understand the real estate industry. Please reach out after listening to let me know your thoughts or questions. I would love to hear from you.

Bottom line…If you are someone who loves to find great deals and you have been waiting for an opportunity to invest some of your money in real estate, we are seeing some incredible deals over the last several weeks that will be great turnkey properties.

Ok ok…In the spirit of Black Friday (I just could not resist) we are going to offer 2 months of free management when you buy your next investment property with Property Rush. ($200 savings).