Updated about 1 year ago on . Most recent reply
Investing in overpriced markets
I am looking to do a house hack in the Tampa/st. Pete area in the next 4-9 months but have been watching supply and days on market steadily increase and asking prices drop on a weekly basis. I have been able to find deals in the current market using the BP calculator that fit my buy box, but when I see that homes in that area are estimated to be ~30% overpriced and am watching in real time prices drop it leaves me unsure what to do. The main worry being that a good deal made today may not be a good deal tomorrow. My current plan is to take my time in finding a deal that either offers great concessions or that can be negotiated down in order to make up for a possible price drop in the future. In summary, any advice on how and when to invest in a market that is not showing a lot of strength? Thanks
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I'm very skeptical of the above sentence. I've never seen anyone that can accurately tell you if a house, stock, precious metal is going to go up or down. Who decided it was 30% overpriced? What criteria did they use to decide that?
I'm never a fan of over-paying, but some markets have remained "overpriced" for decades. Just look at California as an example.
When I look at an investment, the question I ask is will it deliver the returns I want based on what is known, ignoring speculation. Since you are looking at a house hack, the "knowns" are usually much more favorable. After all, you have to live somewhere. Are you better off paying rent or buing a triplex and renting out two units. Almost certainly the latter. What if it is true that the market is 30% overpriced? Does it matter if you essentially pay nothing for housing for a year, or 3 years or 10 years?
Don't let fear stop you from making a decision that can improve your life.