Oct 20 2023 30 mins
This episode was recorded only days before the most recent war in Isreal began. Matt and Adam discuss the necessity of some "black swan" event occuring to shift the US economy, such as a another pandemic, lock downs, or war. We don't know that war in Isreal will lead to a major social or economic event in the United States. But we can see that conditions exist around the world as ingredients for change that may cause rapid shifts here at home. Most likely those rapid shifts would include lower interest rates, which would spike real estate buyer activity and drive home values even higher.
In this eposide Matt and Adam move fast in explaining current real estate market conditions in the Colorado market and use the word "judicious" in providing guidance to buyers and sellers. 2023 is the slowest year in real estate, most likely since the great depression. And prices continue to rise. Why? Real estate appears a strong bet. What is it we see in market conditions that have us remain positive about stability?
Where might interst rates be headed and how should a real estate buyer or seller be thinking right now?
Matt and Adam recommend long term thinking. Any real estate purchase should be a minimum 3 year buy and hold to be most prudent. Note-there has not been a value decline of American real estate more than 2 years in a row, since the great depression. The great depression saw real estate lose only 7% value over a 4 year period. What hurt homeowners at that time was variable rate mortgages and declining wages.
Home buyers should have money in reserve, a payment that is comfortable right now, relative job security and minimize descretionary purchases unless you are in a position that is incredibly financially comfortable.
If you need to move due to circumstances of life such as marriage, divorce, births, jobs or death, have confidence that real estate is simply the best performing asset class in the history of western civilization (Read the rate of return of everything https://www.frbsf.org/economic-research/wp-content/uploads/sites/4/wp2017-25.pdf).