Ep. 73 - Debunking the Real Estate "Doomsday": Why You Should Invest Now
Jul 11, 2023Over the last several months, countless news outlets have predicted an impending "doomsday" in the real estate market.
Headlines heralding a market crash, housing bubble, or decline in home values are a constant fixture in our media landscape. But do these dire predictions hold water? The truth is they often use skewed data or only highlight certain aspects of the market, leading to a distorted view.
Here’s what’s really happening underneath the surface, why we haven’t seen this “doomsday,” and what we should ACTUALLY be doing about the information available to us as investors!
Understanding the Real Estate Market: Supply and Demand
Contrary to these sensationalist headlines, the data tells a different story. For one, supply and demand dynamics in today's real estate market are markedly different from those seen during the 2006-2009 housing crisis.
Currently, we have a high demand for homes but a limited supply, driving up prices. Moreover, most homeowners today are not underwater on their homes but hold significant equity, further stabilizing the market.
Millennial Demand and the Future of Real Estate
The birth rate data also hints toward a robust future demand—specifically, the Millennial market.
The Millennial birth year of 1990 was one of the highest, and those born between 1990 to 1993 will soon be entering the prime age for first-time home buyers. This wave of potential buyers will keep demand high for the next several years, thus supporting real estate prices.
The Role of Interest Rates in Real Estate Investment
Interest rates, often significant in real estate investment decisions, have increased. However, historical trends show that real estate values have held strong or even increased despite rising interest rates.
When interest rates eventually fall, it could further stimulate demand, leading to a potential price war, given the limited inventory. This situation further strengthens the argument for investing now instead of waiting for a hypothetical market crash.
Bottom Line: Make an Informed Decision Using Fact NOT Fear
Media headlines are notorious for amplifying fear and uncertainty. In real estate, such negative headlines could have resulted in potential investors missing out on as much as 60% appreciation over certain periods.
To avoid these pitfalls, it’s vital to make informed decisions based on hard data and logical analysis, not on sensationalist predictions.
The myth of a real estate "doomsday" is just that—a myth! The current state of the real estate market and future projections show strong signs of continued growth.
So, if you're contemplating entering the real estate market, now might be the right time. Don't wait for a market crash that may not come—seize the opportunity and invest in your future today.