Bargain Real Estate after Tax Season

[Ricardo R.]

As most of us know; in most of our markets we currently see low inventory and are seeing buyers ‘euphoria’ with multiple buyers outbidding for properties in some instances. HOWEVER as a somewhat seasoned investor (15+ years) I think ‘all things being equal’ with the close of this year’s tax season we will see increased inventory and here’s why:

It is my opinion that most non-investor buyers which are ‘wiser’ are currently buying NOW because yes interest rates are low but mostly because in 2020 they likely saw a decrease their income and are attempting to purchase a home now before they file their taxes for 2020 which would show that decrease and which would likely affect their chances of getting financing and finding a lender altogether. Once 2020 is filed then the lender requirement of showing 2 previous years of tax returns which would then also include the decrease in income for 2020 (downward trend) then many buyers will be unable to buy due to lack of financing approval. I certainly understand that the IRS is extending the deadline essentially softening the blow but it is my opinion that once the tax season is mostly over which will likely start to coincide with many foreberances expiring we will see quite an uptick in supply... I may be wrong... I’m just an RE investor... what do you think; what are your thoughts?