What’s safer than Real Estate?

[Jonathan Bombaci]

If inflation is north of 7.5% what’s a safer bet than real estate?

The real estate market is feeling a bit “weird”. We’re in it all day everyday. We have 30+ agents helping hundreds of people buy and sell multifamily property in MA and NH. We also own a bunch of units ourselves so I think we’re pretty in tune with the market. That being said the last 2 weeks have had a weird feeling about them. Like everyone is collectively holding their breath…. 

We’re still buying ourselves and have no plans to stop in the near future. Most of my indicators are showing we should try to buy more not less, assuming they’re cash-flowing properties. My belief is that if the average person has $100,000 on the sideline where can they put it besides real estate to outpace inflation?  Also, logically inflation should cause housing prices to increase especially given the massive lack of supply in our markets.

I think most investors will come to the same conclusion and while the single family and condo markets may see a temporary pull back from the crazy movement in the credit markets, I think multifamily will stay strong. Especially if the big firms continue to double down on real estate. 

I’m trying to wrap my head around the macroeconomics of it all and would appreciate others opinions and also any devils advocates. I don’t know what I don’t know and maybe I’m too close to it and I am seeing what I want to see. 

Best,

Jon