When will the bubble come?

[John Krasner]

I constantly hear from friends who are not REI savvy that the bubble will come soon. These are guys who, though they are not involved in REI, are deeply involved in the financial industry and are very focused on daily topics and news sources. Do you, as an investor, fear another housing market crash? Will an upcoming Real estate market crash be synonymous with the financial market crash? When do you think the bubble, if it does indeed exist, will pop?

[Gino Barbaro]

@John Krasner

Hi John

Just follow the money. They are in the financial services. After Trump took over, markets up 30%, best ever since FDR. And they're talking about a bubble?  With a push of a button, that could evaporate in days.  AT least real estate has a few warning signs.

Believe it or not, many markets an cities are still not back to 2007-08 levels. The problem with real estate is that it is market specific, and many markets do look over bought. I invest in multifamily, and it become increasingly difficult to find deals.  Same thing that happened to oil and gold, too much money flowing into the sector. People need a place to live, and are turning more to renting, which is another factor driving up prices.

We always fear big market corrections. All we can do is try to limit our down side risk by "buying right" with cash flowing properties in growing markets with demand for our product and offering a superior product where tenants will want to rent.

We are in a long almost 10 year cycle, so we are overdue for a correction. Don't know when, and no one else does for that matter.

Gino