It might be high time to sell some of your real estate assets.
According to the data some US real estate markets have already been in a correction for a year. Look at Manhattan’s upscale market. Sales prices plummeted by 12% in the third quarter of this year alone. Inventory rose 27% in the last 3 months. We’ve heard San Francisco rents have crashed by more than $400 per month. Now interest rates are rising, and CoreLogic says fraud risk due to lying about income is up 22%. And according to RedFin the number of listings that are slashing prices is up to 33%.
Any of this remind you of a decade ago?
I’ve been through several market cycles. Right now, I wouldn’t be holding a lot of real estate in high cost states that have already peaked. Not unless I was raking in a lot of cashflow and had a big cashflow cushion.
On the bright side, these changes normally mean a gold rush to new, more affordable markets. That can provide quick appreciation wins for those who are out in front of the crowd. If you acquire smart you can benefit from a windfall in equity and secure cash-flowing rentals in these destinations to hold on to through the economic shifts coming.
Of course, there are a variety of potential factors that could alter these trends. Just watch out for being the last one caught holding the hot potato.
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