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A Candid Conversation - How's the market?
Posted On: 2022-05-30 13:48:29.67

The market has been variable. I have a sense that we're going to see a correction. I don't think it will crash. I wouldn't mind if it simply flattened out. How many years in a row can double digit appreciation be sustained?

 

People seem to be sensing a market shift, which has started stimulating more seller phone calls than buyer calls right now.

 

Increasing Interest Rates - The drastic, and unpredictable changes in interest rates should affect the market, at least temporarily. And they will affect payments, cash flow and buying power.

 

Should you buy now? Nobody knows the future. If the right property comes along that makes sense today, and you're in the market, and you can afford it, I would not be inclined to wait because we don't know what is going to happen. With interest rates climbing, it's possible your PITI payment would go up, even if the purchase price went down. (PITI: Principal, Interest, Taxes, Insurance)

 

If I was a buyer right now, and the right property came along, I would buy. In fact I am a buyer right now.  Stacy and I just closed on a property last month and I have 3 more that that close this fall.

 

On Selling - I look at the performance for investment properties. If I have doubled or tripled my money, I consider that good performance. It's hard to complain about that. Sure I'd have to figure out what to do with my money. I don't mind sitting on cashed out funds should the market change, so it's available to reinvest if the market drops. Both Stacy and I sold properties last year because they doubled and tripled our money.

 

You have to look at your own situation. It has been a Sellers market for a while. That's a good time to look at what would be harder to sell in a down market, and to cash out the equity you've earned. So if you have had a challenging property, I’d probably cash out. So far, it's still the market to sell any more challenging properties...maybe. That could change.

 

Market changes often take some time to happen and then more time to change again. If you have a property you might consider selling in the next couple years, this could be the time to do it. You have to look at your whole strategy.

 

What NOT to do - We can learn a lot from how to lose money: buy today, then give up and sell if values tank.  Our advice- always structure a deal, with the right down payment, so that you can wait out any downturns in the market. If it's a rental property, you ideally will be cash flowing as you wait.

 

Change is eminent - no market lasts forever, and we've had quite a long run of a Seller's market. Values, rents and vacancy go up and down, and are influenced by the laws of supply and demand.

 

Instead of promoting buying or selling, I like to ask my clients about their economic outlook and their real estate goals, and try to present ideas that support that.

 

What would we do? (What do we do)
-Consider your overall plan, needs and goals
-Buy if it's a good property that you want or need, and if you can afford it -Structure your down payment so that you can afford to hold your purchase -Hold onto it in markets that favor Buyers
-Buy investment properties if the current market softens
-Sell in markets that favor Sellers or in balanced markets

 

Your Boise Investment Properties Team with Swope Investment Properties

Stacy McBain, Associate Broker

Tony A Drost, Associate Broker

Leslie Halvorson, Realtor

 

 

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