Has the market reach it peak?

Question

Has the market reach it peak? I live in Tennessee and with the way Nashville is growing it is push market price very high in smaller towns 45 min to 1 hour away. Has anyone seen this happen in other areas? Should I keep buying to flip or buying for rentals ?which would be the best investment when market is high but maybe at it peak or do you guys feel it will still stay strong?

Russell Brazil · Answer

The market will reach its peak in 742 years, at which point we will colonoize mars and the moon and abandon the earth. Then we will enter a severely depreciating market on earth.

Russell Brazil · Answer

@Jay Hinrichs

I just think its a fruitless exercise to try to predict market peaks. No one knows. The market can rise and your individual property fall or vice versa. During the market collapse we had neighborhoods continue to go up in value. Weve had neighborhoods drop in the last 5 years too.

If our investing timeline is long, we should buy no matter what (even in 2006). Market falls, dollar cost average ot down. If our investing timeline is short, move to lower risk assets or deleverage.

The problem with this current bull market is its created too many geniuses. Every one thinks they are nostradamus and can forsee market collapses or the bull run continuing.

All I do know is, we will hit a recession, then growth, then recession, then growth, then recession, then growth. Im going to be investing through it all.

Joe Splitrock · Answer

"Difficult to see. Always in motion is the future." - Yoda

Joe Scaparra · Answer

I have to tell everyone on this thread, that I am impressed!!!  I thought I would see all kinds of crazy predictions, but no, you can easily discern who has experience in real estate and, shall we say has less.

@Carson Plant  Maybe, a better thought to ponder as it relates to real estate is: Why do I want to invest in Real Estate?   Or, what is my goal or what is it I am trying to achieve?

For most people investing with real estate, they are either flippers or buy and hold.  Your WHY will lead you in your choosing.  But do understand the flipper can make more money in a shorter time period but with considerable market risk.  While the buy and hold investor is willing to make less money with reduced market risk.  I call this investing phenomenon the California vs Texas method of investing.   Partly because I live in Texas.  You see in California, the way someone makes money in real estate is, you buy high and sell higher.  The only way you make money is the market HAS TO GO UP.  Luckily the market usually goes higher.  The Texas method is you buy and cash flow.  The market could go down, up or sideways, IT DOSEN'T MATTER!

Now to give you some focus, I am a buy and hold investor because my WHY, is to achieve financial independence with predictable and sustainable retirement income.  I buy duplexes that cash flow day one!  The longer I hold them the MORE they cash flow.  The market forces have LITTLE effect on my strategy.  This is because duplex investing caters to tenants seeking low rental cost.  That market segment is GROWING and if you are in a state like TEXAS that is GROWING in population you should NOT run out of tenants to rent to no matter what the economy is doing.  I started buying property in 2002, never sold anything and have never reduced rents.

Learn your Why, develop your strategy and worry not about the direction of the market!  Good luck and Cheers!

Luka Milicevic · Answer

@Carson Plant depends on the zip code and type of housing.

37206-Yes 2 years ago for new construction

Most areas I believe yes for new constuction.

Market is looking more for affordable homes at the moment. Supply has caught up with demand finally in the 350-400k range.

Jay Hinrichs · Answer

Ok  Russ not everyone is getting an Amazon headquarters smack dab in the middle of their market LOL>. lucky guy !! your going to make even more bank!

Andrew Syrios · Answer

Two points:

1) It's very, very difficult to time the market and know when we've reached a peak. Be very careful with this.

2). Yes.

David K. · Answer

Close but we are not there yet. I have not seen the market get flooded with over priced properties. I am not seeing crazy financing. When rates go up there will be big problems.

Prices are high and for MLS rental properties they are unsustainable. Those will go unsold until the next boom.

Will Mace · Answer

Buy low, sell high.....the successful ones seem to have mastered this regardless the market/region, along with the ability of getting creative if/when the market turns and they need to adjust.

In our market (Midwest) it seems as though everyone is winning as a result of growth and demand. Although with an increase in construction costs (concrete, drywall, lumber etc), shortage of qualified labor and increased land development costs I see the spec builders pulling back, mainly due to tighter margins/risk. I don't see how the Spec builders in our market are making more than 8% net, too thin of a margin for us.

We have several hundred apartment doors hitting the market in the next few months along with developed subdivisions, supply will overtake demand and the market will shift....forcing the "professionals" in our local RE world to actually earn their way!

Katherine Hite · Answer

Hey @Carson Plant

Short answer: it's impossible to say whether the market has peaked or not! I agree that more and more homes are coming on the market overpriced but because of that, they are sitting longer which could be great for the patient yet posed investor. Additionally, as I'm sure you've heard, Amazon and EY (among other business heavy-hitters) are bringing over 5,000 jobs to the city this year; these are mostly high-paying roles that are projected to increase the average rent rate by $300! I think this makes a great landscape for both flips and BRRRR rentals; it all depends on the neighborhood! We have not felt the last of this strong arm market yet! I would love to help you find the best property(ies) for you that meets all your needs and satisfies your short and long term goals! Please let me know if I can answer any other questions or provide more insight to you!

Has the market reach it peak?

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