Yesterday during the conversation with my investor, I was asked where I think the real estate market in Philly is going in this special time where people are afraid that the pandemic is going to kill their investment.

This concern is legit, especially data and statistics of the economy and unemployment rate are not that great. However, my hypothesis is that COVID 19 WON'T END PHILLY'S REAL ESTATE BOOM. Our economy is still well-structured if anyone wants to compare this time to the Great Recession 2008. The acute pain may be still there but it will be temporary. I have three reasons going from big picture of the whole economy to smaller pieces of real estate investment:

1. The ECONOMY IS RECOVERING: I myself also invest in stocks and watch the movement every day. In a sense, stock market is like a thermometer of the economy. So, to say that the economy is recovering, I'm going to take the stats of the stock market to show you. If you look at the picture below, it was deep down in March and half part of April, which is also the time I sold one house in a good week (that's very rare to me). However, NASDAQ, SP500 and Down Jones are all gradually increasing their points. It's now almost the end of July and the stock market has been much better. You can see that NASDAQ even increased their points higher than the time before Covid in America boomed (Feb). I'm confident that the stock market is going to fluctuate like it has always been, but the overall trend is going up. The real estate market of course is different from the stock market but they are similar in the sense that they both highly depend on economy. If we can measure the health of the economy by stats in stocks, we can also rely on the stock market performance for predicting the real estate market and where it's going. Besides, as I said earlier, the pandemic is not the Great Recession 2008 where the economy was deeply and structurally impaired. It took years to recover because we had to fix every single thing. This time is temporary because the economy was well-structured, under control and had very good stats (stock market, unemployment rate...)

2. BRIGHT MLS REPORT for June 2020 showed POSITIVE sign of Philly real estate market. Buyers demand was strong. "June was the first month on record new pending home sales exceeded 10,000". The closing volume improved by a record of nearly 32% from last month, but it's still the slowest June in 9 years, which is understandable. The median sales price high on the strength of townhomes ($239.9K, 4.3% up). In a special case, Point Breeze townhomes closed at a median price of $383K, 25% up. The numbers show that buyers are coming back and ready to invest against Covid concerns.

3. WHY NOT INVESTING NOW? The rule of thumb in investing is that you shouldn't time the market and in reality, you almost can never time the market as investment sometimes is not about rationality; it could be a game where random variables appear all of a sudden. Tomorrow's dip may still be higher than today's pricing. I have a Mathematics & Economics degree and got 4.0 GPA at college, but I made terrible investment decisions before even when I programmed a deep learning algorithm using probability and statistics to predict the stock market. Sorry you investors, I have to tell you straight that as much I agree with you that we need to find the right time to invest, you can never know when is right. Instead, stick with your plan! Know what YOU WANT and buy low + sell high. That's it! A good investment decision includes a Good deal + Good time. You cannot control time but you can control the deal you choose. Be good at that and it's good enough. One thing to consider also is that SITTING ON THE MARKET ROBS YOU OF INCOME YIELD. If you're waiting for several months to invest, you could have finished a project and enjoyed a big fat profit from it. Warren Buffett, a legend investor said "Be fearful when others are greedy and greedy when others are fearful."

I'm not writing this post to encourage you to invest without a thoughtful consideration. You brilliant investors are hungry for profit but also careful in every step you make. I respect that and encourage you to keep doing so. This post is share my personal thoughts on a common question I received from so many experienced and novice investors for the past few months.This is a very scary time but I think it's a momentary pause. I believe that the real estate market in general and in Philly will continue prospering. Good luck!

Philadelphia, Pennsylvania

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