Housing prices from 1986 to 2021

[Jaron Walling]

Growing up in the mid west I'm pretty good at seeing things at face value. I understand the difference between assets and toys (most cars, motorcycle, boats, RV, etc). I started my investment journey about 4 years ago so I consider my self young in the industry, but I'm seeing property sales that make no sense. Maybe it's a gut feeling or inner defense mechanism but I don't know how some of these people are affording these homes. Neighborhoods that I considered VERY cheap are now priced to the moon. I always try to keep emotion out and let the numbers direct my decisions. The numbers are leading me to SELL EVERYTHING> I don't want to sell> I want to buy and hold!

I have a few single families with an average of 6.75% ROI. They're at market level and fully remodeled. One of my properties is free and clear. How would you fund the next deal? Would you put a mortgage on it and wait for this eviction moratorium to pane out? Are you even buying right now? The chart below is set to the year I was born.

[JD Martin]

Possibilities:

1. The paradigm has shifted and you haven't shifted with it.

2. Your gut feeling is correct and things are amiss.

3. You are missing critical information that allows you to make informed decisions.

4. You are misinterpreting/misreading the data.

5. You are reading the data correctly but are being influenced by exterior factors.

That's pretty much the crux of it. Look at any investment in any time and you will find people who look like Nostradamus, and people who missed the boat for whatever reason - fear, horse-drawn carriage syndrome, mistaken assumptions, etc.

The bottom line is that you'll never know for sure except in the rear-view mirror. The best you can do is make sure your own bottom line is reasonably secure and make decisions based on what makes you comfortable.