Buying Real Estate in Different Market Conditions

The housing market never stays the same for long. Demand and supply rise and fall constantly. Even seasonal changes are noticeable. Like, homes sell faster and for more money in the spring and summer than in the winter and fall. 

So because of these constant shifts, people are always trying to “time the market”, right? They want to buy low and sell high. But there are a few things wrong with that:

  1. Timing the market is pure luck. You can’t know the market has peaked or bottomed out until after the fact. So if you just happened to buy at the bottom of a lull, you got lucky. 
  2. The price isn’t the only factor in getting a good deal. Things like interest rates and negotiating power make a huge difference in real estate.

Higher Interest Rates Can Offset Lower Prices (and Vice Versa!)

Think back to the peak-pandemic housing market - a lifetime ago, I know. LA County homes were averaging around $900k. Interest rates were still at a crazy-low 4%. That left new buyers with a mortgage payment of around $3,470. 

That was about the time people started crying housing bubble, and claiming the market would implode. So, some investors decided to wait for a “market crash,” expecting to get a steal when prices dropped.

But what has actually happened?

Well, we have seen a market correction. During the winter lull, LA County home prices hovered around $715,000. Sounds like a dramatic dip, right? But, because of the 6% interest rates, the monthly mortgage payment for these “market crash” buyers is $3,463.

That’s right. These buyers lost out on two years of rental income to save $7/month.

There is No Wrong Time to Buy Real Estate 

Now look, today’s buyers are still going to do just fine! They’ll start earning that passive rental income and watching the value of the property grow over the long term. In fact, since they bought at a lower price point, they’ll probably see their equity rise faster than those who have to recover from the value dip. 

The point is…it doesn’t really matter when you buy because it’s always a good time to buy real estate!

Interest rates are low? Cool - that means you’ll spend less on interest expenses. Home prices are low? Cool - it’ll be easier to come up with the down payment and you’ll probably see strong equity growth.

There are good deals to be had in all market conditions. So if you’re interested in investing, take the leap now. As the saying goes, “Don’t wait to buy real estate. Buy real estate and wait.”

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Since the start of the company in 2016, Gatsby has acquired over 64 deals. As of March 1, 2024, 46 of those offerings have been completed. This makes Gatsby Investment the leading real estate syndication company in Los Angeles. View completed deals.
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