Is the housing market crashing? 📉

What does a house wear?…

Address!

Ok, now let’s get into it…

• Housing Market Rollercoaster: Experts debunk the myth of an impending housing market crash

• Kiyosaki's Real Estate Wisdom: Robert Kiyosaki shares two pivotal principles for thriving in real estate investment

  The Airbnb Effect in SoCal: Stringent regulations on short-term rentals in Palm Springs trigger a unique shift in the local real estate market

• 🔥 Deal of the Day! 🔥: 4 bd | 5 ba | Wayzata, MN

Housing Market Fears Justified?

Are we teetering on the edge of a crash? Not quite. Let's dive into the data and to understand why.

First up, those mortgage rates. They've been a wild ride, hitting a peak of 7.99% in October 2023, according to Bankrate. But in a recent twist, they've eased slightly to 6.93% as of January 2024. This fluctuation is key to understanding the market dynamics.

Now, let's talk about home sales. They dipped 2% from August to September 2023, and then another 1% from November to December 2023, as reported by the National Association of Realtors. Yet, despite these dips, the median sale prices were no joke, standing at $394,300 in September and $382,600 in December.

Inventory levels? Still tight. We're looking at a 3.4-month supply in September and a slightly better 3.2-month supply in December, far below the ideal 5-6 months for a balanced market. And let's not forget, the number of homes for sale in major metro areas was down 8.9% year-over-year in September.

Foreclosures, a key indicator of market health, show a mixed bag. There were 33,952 foreclosure filings in August 2023, but by December, it dropped to 30,314.

So, what's the big picture? The consensus among experts is clear: while the market is cooling, it's not heading for a crash. The reasons are compelling. We've got an ongoing shortage of inventory, cautious homebuilders, a surge in demand from demographics like millennials and Hispanics, stringent lending standards, and relatively low foreclosure activity.

In short, while prices might adjust, they're not plummeting. Think of it as the market taking a breather, not collapsing. As Mark Fleming from First American Financial Corporation puts it, it's all about "Econ 101" – more buyers than sellers means prices hold strong. (source)

Kiyosaki's Keys to Real Estate Riches

Let's talk about Robert Kiyosaki's two golden principles for building wealth in real estate. Kiyosaki, a renowned real estate mogul, emphasizes the significance of employment trends and the avoidance of high-end properties in successful real estate investing.

Firstly, he suggests focusing on areas with stable employment, steering clear of regions heavily reliant on industries like tourism or oil, which are more susceptible to economic downturns. The idea is to invest where jobs are secure, as this drives real estate demand.

Secondly, Kiyosaki advises against investing in luxury properties, pointing out that these are often the first to be hit in financial crises. Instead, he recommends targeting mid-priced properties, which remain in demand even when people need to downsize. He advocates for investing in mid-range properties which tend to maintain demand, even as markets fluctuate, providing a safer investment harbor during turbulent times.

Adhering to these principles, Kiyosaki has navigated through various economic challenges, including the COVID-19 pandemic, demonstrating the effectiveness of his approach. His strategy underscores the importance of informed decision-making based on thorough analysis of market trends and economic stability, rather than impulsive or trend-driven investments. This prudent approach can offer investors a more secure pathway to building sustainable wealth in the real estate market. (source)

Palm Springs' Real Estate Tango

You've seen the 'For Sale' signs mushrooming in dreamy neighborhoods, right? Well, there's a twist in the plot. Palm Springs, that oasis of vacation vibes, is feeling the heat with its Airbnb market. Thanks to new rental regulations, the short-term rental game has flipped on its head.

Picture this: In Palm Springs, only 20% of homes in a neighborhood can moonlight as short-term rentals. This cap has left some Airbnb-saturated areas in a lurch. Now, homeowners who can't rent out their pads are thinking of selling. Talk about market turbulence!

And the prices? They're doing the tango. Properties that were once fetching over a million are now wrestling to hit $800,000. Tim Sarlund, a real estate agent, paints a grim picture of plummeting home values, with some pandemic-era buyers even staring down the barrel of foreclosure.

But every cloud has a silver lining. For savvy investors like you, this could be an opportune moment to swoop in. Just remember, those short-term rental permits aren’t part of the deal when you buy a property. Check the city's rules first to avoid any surprises. (source)

🔥 Deal of the Day! 🔥

Address: 200 Black Oaks Ln, Wayzata, MN 55391

Beautiful home if you can deal with the negative cashflow and wait for appreciation. This property would likely make an excellent vacation rental due to its prime location in Wayzata, a charming and upscale city known for its beautiful lakeside scenery, proximity to Lake Minnetonka, and vibrant downtown area, offering an ideal mix of relaxation, natural beauty, and local attractions.

Airdna data:

Estimated monthly payment: $9,649/month

Estimated monthly revenue: $9,341/month

Cashflow excludes additional operating expenses. Always confirm local regulations, HOAs and permits before purchasing a property.

Eyes on the prize, investors! Remember, knowledge is power in the dynamic world of real estate. Keep learning, keep growing. Until tomorrow, keep those keys jingling!