Welcome to the WealthBuilders Podcast with Karen Conrad Metcalfe and Bill Bronchick discussing how to navigate real estate opportunities in uncertain times.
Real estate attorney Bill Bronchick provides expert insights into the current real estate market. He reminds us the market is driven by local supply and demand dynamics, with demand being up in conservative cities due to an influx from liberal states. Learn about the effects of interest rates and long-term appreciation in today’s episode.
Tune in for practical steps to make informed real estate decisions.
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Episode Show Notes
Beyond the Headlines: A Deep Dive Into Today’s Real Estate Market
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Current Market Conditions and Historical Context
- The current market is NOT heading for a crash like in 2008.
- Real estate is local and factors like affordability are irrelevant in major cities like Los Angeles, San Francisco, and New York.
- Supply and demand is at the neighborhood level, even within a city like Denver, different neighborhoods have different market conditions.
- Tax laws and interest rates impact the market, citing the late 80s crash due to tax law changes.
Impact of Tax Laws and Interest Rates
- Favorable tax laws currently in place include the preservation of 1031 exchanges and the mortgage interest and property tax deduction.
- Rising interest rates have an impact on demand and supply in the real estate market.
- Interest rates affect buyers’ ability to afford homes which impacts supply and demand.
- Sellers with low-interest mortgages might choose to rent out their properties, reducing supply.
Local Market Dynamics and Supply and Demand
- Statistics in the Denver Metro area indicate the current supply is still half of normal.
- Colorado Springs and South Florida have varying impacts of supply and demand.
- Factors affecting supply: construction costs, availability of construction workers, and local regulations.
- Inflation and the cost of materials impact construction, as well as the shortage of usable land in areas like Colorado.
Regional Market Differences and Trends
- Colorado Springs is attracting more people than Denver due to its conservative political climate.
- People are moving from liberal cities to more conservative areas, citing examples from California and Minnesota.
- COVID-19 has impacted current work styles, with more people working remotely and moving to areas with better lifestyles and lower costs.
- Consider historical trends, such as the urban revitalization in New York City in the 1970s.
Opportunities in the Real Estate Market
- It is always a good time to buy real estate, because motivated sellers with specific problems are always available.
- Real estate is about long-term investment and appreciation, not just cash flow.
- Focus on long-term appreciation and be prepared to weather downturns.
- Look for opportunities in areas with long-term growth potential, such as those with new Walmart or Starbucks developments.
Strategies for Investing in Real Estate
- Attend town meetings and stay informed about local redevelopment plans and zoning changes.
- Get involved with building affordable housing and working with city officials to overcome challenges like parking and taxes.
- Trump negotiated with a city to make a development project attractive to investors.
- Focus on individual deals within your local market, leveraging your knowledge of motivated sellers and local conditions.
- Trust in the Lord for guidance and don’t rely solely on your own knowledge or social media.
- Check out Legal Wiz online courses for real estate investors.
