A Housing Market in Yo-Yo Recovery
If you read my articles regularly, you’ll know that I am on a strict, no-news diet. Here at REI360, we strive to be news makers, not new consumers. As such, I regularly ignore the daily ups and downs of the 24/7 news cycle.
One exception to this rule is Sunday morning.
On Sundays, I enjoy curling up on the couch or, in better weather, sprawling on my back deck. Once I’m comfortably stationed with a hot cup of coffee in hand and the kids absorbed in cartoons, I dig into the online edition of the Wall Street Journal.
I browse through headlines and read select articles that catch my attention. Each session begins with breaking stories and then continues with national news, world new, technology, markets, opinion and finally Real Estate. Real Estate is my business, but it’s also my passion. So reading the opinions of my contemporaries can be enlightening, enraging and eve comical.
This Sunday, I found myself feeling a bit like a yo-yo.
For the past 3 or 4 years, various commentators have written articles predicting the bottom of the housing market. They’ve announced its recovery and returned recession time after time. As recently as mid-March, the talking heads were expressing disappointment in the number of home sales.
Imagine my surprise on Sunday when I discovered that the market had fully recovered. In fact, it seems that in many locations throughout the country demand has out-paced supply. Prices are on the rise. In addition, new foreclosures are at their lowest level since 2006.
So what’s the real story?
The real story is the same as it has been since the housing collapse in 2007-2008. Real Estate is local.
One of the foundational principles that I preach to my coaching clients is to define a target market. A target market is a small geographic area in which you plan to advertise, contract, and buy properties. One major reason to define your target market is so that you can become the expert in that area. You’ll know when is the time to buy and at what price. You’ll know when buyers are lining up for more properties and when everyone wants to sell.
Most importantly, target markets allow investors to make decisions and take action based on what they know instead of what someone else is telling them.
After I shook off the reading-induced dizziness on Sunday, I put down my iPad and went back to my media fast. I’m sick and tired of hearing about the ups and downs in the national Real Estate market. I know what is going on where I invest because I’m the expert.
Next week, I’m trading my Wall Street Journal for a good book.