URGENT: What is an Opportunity Market? | #KeriTV Episode #11
Hey guys, it’s Keri TV. Today’s topic is, “Why Urgency is Key.” Check it out.
Okay. So, the market’s been crazy. Every other headline is, the market’s going down, sales are decreasing, they’re at their seventh highest deduction rate, etcetera. The fear is being put out like crazy. Now, I’m sure a lot of people are like, what the hell’s going on? What do I do? The market’s going down. What do we do? Now, the problem is there are so many different buyers who have not bought anything yet, and they’ve still been searching and have been outbid all year. They’re exhausted. There are people who have been waiting to try to buy something because they’re contingent, and it is a very hard market to buy something when you’re contingent. Then there’s also people who are trying to 1031 exchange, and they can’t get into anything. The little media that comes out, which of course they report facts, and that’s always important. There have been more price reductions and things are hitting their peak. Now, to say that things are going to come crashing down is insane. The problem is, when people here things in the media, they don’t go to specialists and they don’t look at the real facts and the analytics. They just go off based off what everybody else is doing. There’s no way to get ahead in the world if you’re just doing what everybody else is doing. You have to look at what is happening for you in your lifestyle and what works for you when it’s time to buy or sell a home. Nobody can time the market. You’ve looked at the biggest entrepreneurs and real estate investors in the world who have tons of properties. How many of them have filed bankruptcies? None of them have timed the market. If they did, we would all be rich, right? Because we’d buy their formula. But the thing is, you can never go wrong when you’re investing in real estate when you can afford to buy, you have the down payment, and you’re ready and prepared to make offers. Or, on the flipside, if you’re selling and you’re getting a price that is able to afford you to get into a new property.
Now. Why we talk about urgency is, over the last few weeks, maybe even the last couple of months in some areas, there’s been this big, OH! What is happening? The market’s going down. I’m waiting to buy, etcetera. What happens is, everyone that’s in this group think mentality gets scared. They stop looking. They’re not making moves. They’re making offers that are crazy under asking. The election, we’re at the midterm, always slows things down a bit. But the problem is right now, rates are actually starting to go up. If you’re looking to buy a property, for example, it’s a million-dollar property. Right now, if you’re at about a four-point eight interest rate, that’s a little bit higher than what they are right now, but that’s up another point from what they were earlier this year and last year, that people were getting locked in at. If that million-dollar house goes up one point, one interest point, you’re paying another five hundred dollars on that property. That’s just for your interest. Principal and interest. That’s not including property taxes. Not only are you paying five hundred dollars more a month for the property, your affordability rate also goes down, because now your debt to income is going to be higher. You need to make more money and lower your debt in order to qualify for that house, if you’re right on the brink of buying what you could afford. So, the key for urgency is you have to look at when you are ready to buy or sell and make decisions based on your personal lifestyle. If you follow the trends and listen to the media, you’re just going to get lumped into every other schlep out there.
The problem is, people don’t realize what happens. People say there’s a slowdown. They hold off a bit. They get scared. Once they see that those houses aren’t dropping by fifty percent or things aren’t going on a fire sell, everybody gets back onto the market and it becomes a sellers’ market again. And, on top of that, we’re going into the fourth quarter. Now, if you know me and have worked with me, I always say fourth quarter is such an awesome time if you’re a buyer. Mh-hmm. Sellers, I love you. The fourth quarter brings around really good deals. Why? People travel. People are out of the area. People are busy around the holidays. They don’t want to go house shopping. You get some people that are still out there. I’ve definitely had multiple offers every single Christmas. But still, the buying pool is less. There’s less competition, and on top of this fear of the market, you’re going to be walking into the best time ever to buy something. It’s football season. Shoot me now. Ladies, go out there on a Sunday. Get looking at houses. The hubby can come later. It’s such an awesome time to get into something. Before you know it, the rates are going to be up half a point, another point, and you’re going to be looking at houses even lower in price. What is the point of waiting? Especially if you’re in a position to buy or sell.
I think the fourth quarter is the best time to get into a new property. I’ve said that for many years. Nothing is wrong with properties that are still on the market. Based on the fact that we’re in LA and we’re in a very wealthy city. There’s a lot of new industries and new jobs coming in here, we will go through an adjustment. One hundred million percent we’re going to go through an adjust. Things have to adjust. I’ve been doing this for thirteen years, so I’ve seen the cycles. I know what happens. I know what to expect. Things have to adjust. Things have to come back to some type of normalcy. People have cashed out on their properties, which is awesome, but of course, a slowdown of growth is not a bad thing. Price reductions are not bad things at all, especially if you’re looking to sell and buy. Most people are either first time buyers or selling and buying another property.
The point is, that I feel so completed to make today, I don’t know if people understand how much interest rates affect and how inventory’s rising, but it’s so low anyways that you’re going to have, instead of ten offers on a house, you’re going to have five. Maybe two. Instead of something selling in a week, it could take a month. Nobody is going to die. And I promise you, I’m buying right now. I’m investing in places. I can’t wait to get my hands on some Q4 deals. There’re so many good opportunities out there. Of course, if you’re flipping and putting a lot of money into places, it might be a tougher time to do something like that because things are adjusting. It’s healthy to adjust. We have no problem with the adjustment happening. Just know your facts. Know your numbers. Talk to your people. The last thing you want is to be priced out of this market. Then you’ve got nothing to do. Overall, have an urgency to buy in this current market. Besides that, know when it’s right for you to buy. If you’re getting married and shelling out a ton of money on a wedding or having a baby, it may be a very difficult time to be shifting and getting into something. You know? Get into that house before the baby is born. Before you start trying. Get into something before you’re planning the wedding, because no one needs that stress. I know it’s a natural time to think it’s a great time to be out there looking, but I’m saying, look at your lifestyle and what you can afford in your timing, and don’t listen to anything else out there. You will make the right decisions investing in real estate, your write-offs, and home improvements. Building equity is never a bad way to go. Call your experts buy and sell when you’re ready.