Who's Willing to Overpay in Anticipation of Inflation?

[Davide Formica]

"Should inflation get out of control, Fed officials believe they have the tools to control it." - Do they?

https://www.cnbc.com/2021/03/1...

Those of us who are constantly analyzing multifamily deals and putting offers know that there is a high demand as deals keep going above the asking price. Maybe all those investors "overpaying" for real estate deals are the wise ones in the end!

[Greg Scott]

I am also seeing people pay prices for properties well over asking.  The prices they pay ONLY make sense if rent increases accelerate and/or cap rates continue compressing.  It is frustrating to compete against such irrational behavior.

They may be right and they may make a lot of money.  On the other hand, they are making somewhat speculative bets.  If the market continues at today's pace, they'll have lousy returns. So, even if they are right, I would not call them wise.  Buying a winning lottery ticket does not make one smart.