Is the market too hot right now?

[Tyler D.]

I started investing a couple of years ago, and since then, it seems like the market has gone from hot to insane.

Currently, I've been searching around in a city I chose, that isn't on any of the top lists for real estate investment, and there is such incredible competition here that any deal that is remotely good is gone almost immediately. I have heard from local agents that there are many out of state investors throwing money at bad properties, sight unseen.

Add to that many areas have seen ~10% appreciation in 2020, and are expecting the same for 2021. That can't realistically continue for a longer period of time. 

My gut feeling tells me that we are in a period of irrational exuberance. It seems like there is so much competition that it may be better to invest elsewhere until the market returns to a state of normalcy. I'm sure many of you will have a different opinion on that matter.

What are your thoughts?