On The Market

Today’s housing market has a lot of people scared, and investors are worried as well. Home prices are starting to slump, inflation is hitting decade-long peaks, and interest rates have turned everyone’s cash flow cushions into break-even deals at best. Is there any respite in the wild real estate market? And why do top investors seem so excited about it? 

We’re back on another correspondents episode of On the Market, where Professor Dave has asked students Henry, James, and Kathy to bring in their favorite real estate market news for show-and-tell. These stories hit different aspects of the housing market, showcasing the cracks forming in the overall economy and what investors need to be prepared for to react. We talk about how home flips are being discounted across expensive coastal cities, why rent price growth is starting to stall, and how buyers got their negotiation power back.

We’ll also be touching on the recent inflation data, showing that we have a long way to go until we return to the good ol’ days of two-percent price growth. Then, we take a request from the On the Market Forums where we answer an age-old question: When should you sell a BRRRR property? All this, and more, coming up on this week’s data-first housing market deep dive! 

In This Episode We Cover

Another nasty inflation report and what this could mean for the housing market

Why flips are becoming riskier in today’s volatile market and how to prep for a profitable flip

Rent growth data and which markets as seeing the strongest (and weakest) rent growth numbers in the nation

Why buyers are asking for more repairs, bigger seller concessions, and lower prices

When to sell a BRRRR property and using cash-on-cash return vs. ROE (return on equity)

Fool-proof deal analysis and why investors need to be careful buying in 2022 and 2023

And So Much More!

Links from the Show

Find an Investor-Friendly Real Estate Agent

BiggerPockets Forums

BiggerPockets Agent

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Dave’s BiggerPockets Profile

Dave’s Instagram

Henry's BiggerPockets Profile

Henry's Instagram

James' BiggerPockets Profile

James' Instagram

Jamil's BiggerPockets Profile

Jamil's Instagram

Kathy's BiggerPockets Profile

Kathy's Instagram

NPR Price Drops

Redfin Rent Growth

USA Today Punch List

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-48

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US housing markets have started to shift. The massive run-up in home prices eventually led us to high interest rates, high inflation, and a generation of renters who can’t afford to buy, even with price cuts. This should come as no surprise, as Moody's Analytics estimates that some eighty percent of real estate markets are overvalued. Of those markets, where are the opportunities to invest the highest as prices naturally start to decline?

Instead of speculating, we brought Cris deRitis, Deputy Chief Economist at Moody's Analytics, onto the show to explain why this is happening, what his team is forecasting, and how investors like us can stay prepared. Cris and his team diligently look through data to predict how the housing market will move. He knows that it’ll take time for the market to finally reach equilibrium again. But, unfortunately, this may not happen any time soon.

Cris’s team is focusing on looking at a few things: demographics, supply, and demand. Each influences the others severely and leaves hints at where the housing market is headed next. Dave and James tag-team this episode, touching on whether US housing will become even more unaffordable, long-term home supply predictions, affordable housing, and a demand drop-off that could end real estate investing over the next decade.

In This Episode We Cover

Overvalued housing markets and why most homes in the US aren’t worth the price

How to forecast housing market movements and the most important factors to look for

Whether or not the US will end up like other countries with astronomical home prices 

Home price drops and how bad it could get in the most overvalued cities

Which real estate markets will still see price growth in the coming months/years

The myth of affordable housing and why everyone (and no one) wants to build it

Population drop-offs, demand shifts, and other future events that could kill the housing market 

And So Much More!

Links from the Show

Find an Investor-Friendly Real Estate Agent

BiggerPockets Forums

BiggerPockets Agent

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Dave’s BiggerPockets Profile

Dave’s Instagram

James' BiggerPockets Profile

James' Instagram

Book Mentioned in the Show

Real Estate by Numbers by Dave Meyer & J Scott (Use Code “DAVE” For 10% Off!)

Connect with Cris:

Cris' Email

Cris' LinkedIn

Cris' Twitter

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-47

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The 2023 housing market predictions are here. We heard you in the forums, the comments, and all over social media. We know you want Dave, the data man, to give you his take on what will happen over the next year. Will housing prices fall even more? Could interest rates hit double digits? And will our expert guests ever stop buying real estate? All of this, and more, will be answered in this week’s episode of On The Market.

Unfortunately, Dave threw his crystal ball in with his laundry this week, so he’s relying solely on data to give any housing market forecasts. He, and our expert guests, will be diving deep into topics like interest rates, inflation, cap rates, and even nuclear war. We’ll touch on anything and everything that could affect the housing market so you can build wealth from a better position. We’ll also discuss the “graveyard of investment properties” and how one asset class, in particular, is about to be hit hard.

With so much affecting the overall economy and the housing market, it can be challenging to pin down exactly what will and won’t affect real estate. That’s why staying up to date on data like this can keep you level-headed while other retail homebuyers run for the hills, scared of every new update from the Fed. Worry not, this episode is packed with some good signs for investors, but also a few worrisome figures you’ll need to pay attention to.

In This Episode We Cover

The most important variables that could impact 2023’s housing market 

Which asset class will be hit hardest by price cuts and where investors can find deals

Inflation, bond rates, and how the federal funds rate could impact homebuying

Housing price predictions for 2023 and how far home prices could slide

The seller’s vs. buyer’s market and how brand new investors can take advantage

Whether or not cap rates will start to increase even as inflation pushes rents higher

And So Much More!

Links from the Show

Find an Investor-Friendly Real Estate Agent

BiggerPockets Forums

BiggerPockets Agent

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Dave’s BiggerPockets Profile

Dave’s Instagram

Henry's BiggerPockets Profile

Henry's Instagram

James' BiggerPockets Profile

James' Instagram

Jamil's BiggerPockets Profile

Jamil's Instagram

Kathy's BiggerPockets Profile

Kathy's Instagram

Reviewing Dave’s 2022 Housing Market Predictions

Hear Our Predictions from Earlier This Year

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-46

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Finding cash flow isn’t easy, especially with rising interest rates, high home prices, inflation, and an economic crunch on everyday investors. Where is the best place to park your cash while riding out today's economic unfolding? Some say vacation rentals—the highly popular (and even higher cash-flowing) real estate strategy many new investors have adopted. But what about medium-term rentals? They’re a cross between regular rental properties and short-term rentals, marketed mainly to traveling professionals, travel nurses, and digital nomads. How is this under-the-radar strategy faring?

Unfortunately, we can’t ask Dave this question. But, we can ask Sarah Weaver and Zeona McIntyre, two financially free medium-term rental experts and authors of the new book, 30-Day Stay. Zeona, a former short-term rental fanatic, changed her strategy after finding that medium-term rentals provide similar cash flow with far less work. Sarah Weaver, investor and real estate coach, lives her nomadic lifestyle thanks to a portfolio of high-performing medium-term rentals.

The most attractive thing about this strategy is that it can work almost anywhere, in less expensive homes, with far less work necessary. That means you get to keep traveling, investing, or whatever you like to do best, while your rental properties quietly pump out passive income. In this episode, you’ll hear all about this extremely lucrative strategy, how today’s housing market is affecting it, and what you can do to set your medium-term rental apart from a sea of others.

In This Episode We Cover

The medium-term rental strategy explained and in which markets it works best

Medium-term rentals vs. short-term rentals and the differences you can expect in cash flow, occupancy, and property price

How high inflation and limited discretionary spending will affect the medium-term rental market 

The hands-off management style medium-term rentals provide investors

Furnishing your rentals for cheap and how to have a headache-free setup

Rental regulations and how new laws could affect medium-term rental investors

And So Much More!

Links from the Show

Find an Investor-Friendly Real Estate Agent

BiggerPockets Forums

BiggerPockets Agent

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Dave’s BiggerPockets Profile

Dave’s Instagram

Kathy's BiggerPockets Profile

Kathy's Instagram

Furnished Finder Stats

Book Mentioned in the Show

30-Day Stay by Sarah Weaver and Zeona McIntyre (Use Code “SARAH” or “ZEONA” for a discount)

Connect with Sarah & Zeona:

Sarah's BiggerPockets Profile

Zeona's BiggerPockets Profile

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-45

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Dollar-cost averaging is advice we’ve all been given. But, during a crash, or even a dip, it can be enticing to throw all your savings into an investment with hopes that it’ll quickly skyrocket back up. Is this a smart move, or would this ruin the “consistent investing” advice altogether? To help clear things up, we’ve brought on Nick Maggiulli, author of Just Keep Buying: Proven ways to save money and build your wealth. 

Nick, just like Dave, has been a spreadsheet freak for a long time. They bond over their love of data and how looking at the numbers can help you make much better investing decisions. In a time where FOMO-investing, financial freak-outs, and anxious feelings toward inflation run rampant, Nick provides some soothing words on how any investor in any asset class can successfully start building wealth with little-to-no effort.

Dave, Nick, and expert guest Henry Washington also riff on REITs (real estate investment trusts), real estate investing, and advice for new investors. Whether you prefer stocks, bonds, rental properties, crypto, or a mix of all four, this episode will provide some much-needed advice for you to make it through the recession with far less stress.

In This Episode We Cover

Dollar-cost averaging and whether this investing strategy works for real estate

FOMO investing and why so many people buy at the top 

The two different definitions of dollar-cost averaging and which is the better bet 

Investing during an economic crash and how even uninformed investors can make money

Advice for brand new investors and why now may be the best time to invest

And So Much More!

Links from the Show

BiggerPockets Forums

BiggerPockets Agent

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Find an Investor Friendly Agent in Your Area

Dave’s BiggerPockets Profile

Dave’s Instagram

Henry's BiggerPockets Profile

Henry's Instagram

Books Mentioned in the Show

Real Estate by the Numbers by Dave Meyer and J Scott

Just Keep Buying by Nick Maggiulli

Connect with Nick:

Nick's Website

Nick's Twitter

Nick's Instagram

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-44

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page!

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Gen Z, the generation just on the cusp of homebuying age, may not have a chance to buy homes in the first place. For years, we’ve heard how millennials have been struggling to buy homes—but what about the generation behind them? With rising affordability issues, wages that won’t match inflation, and a recession on the horizon, will this newest generation ever be in the clear to become homeowners? Or, will they become the largest generation of renters the world has ever seen?

In today’s episode, Dave breaks down the data behind the demand, showing where Gen Zers are heading, what they’re buying, and whether or not they even want to buy homes at all. This data highlights significant differences in where renters/homebuyers of this generation are moving. Landlords, pay close attention—buying in any of these high-demand cities could mean steady rent checks for years to come.

We also chat with twenty-four-year-old investing mogul, Soli Cayetano, a Bay Area-based investor who grew her portfolio entirely out-of-state. Soli, being one of the oldest Gen Zers, has insight into why some of her peers will/won’t be buying homes anytime soon. She also gives some stellar advice to new or young investors just getting into the rental property game.

In This Episode We Cover

Whether or not millennial housing demand is peaking and how household formation is changing

Gen Z’s outlook on homeownership and why many are choosing to rent

The top cities where Gen Z renters and homebuyers are moving to

Home affordability and why it may stop Gen Z dead in their tracks

The easiest way for Gen Z to begin investing in real estate (low money down!)

Starting and scaling an out-of-state rental property portfolio 

And So Much More!

Links from the Show

BiggerPockets Forums

BiggerPockets Agent

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Find an Investor Friendly Agent in Your Area

Dave’s BiggerPockets Profile

Dave’s Instagram

Yardeni Demographic Data

Rocket Homes

moveBuddha

NYT/CommercialCafe

Book Mentioned in the Show

Real Estate by the Numbers by Dave Meyer and J Scott

Connect with Soli:

Soli's BiggerPockets Profile

Soli's Instagram

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-43

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page!

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Commercial real estate isn’t the sexiest asset class out there. With industrial, office, and warehouse buildings, most investors are enticed by single-family homes, duplexes, triplexes, and other “traditional” types of real estate. But in a recession, these may not be the best asset classes around. J Scott, author, investor, syndicator, and the godfather of flipping, thinks these often overlooked asset classes could be primed to explode in value over the next few years.

Welcome to On the Market, where familiar faces Dave Meyer and Henry Washington invite J back to the show to talk about inflation, interest rates, and the best real estate opportunities around. We also talk about the importance of knowing how to analyze deals during times like these, as price drops could allow you to build wealth far faster than ever before. If you’re still new to real estate, waiting to get your first deal, or want to build your portfolio to greater heights, grab Dave and J’s new book, Real Estate by the Numbers, where they go into factors behind the formulas.

In this episode, we debate single-family homes vs. large multifamily and commercial investing, how to go beyond the numbers, and the crucial questions to ask when buying or selling a real estate deal. Plus, you’ll peak into the minds of one of the most successful real estate investors around, whose track record speaks volumes, and hear exactly what he’s buying in this market.

In This Episode We Cover

Why many real estate investors are choosing to sit on the sidelines as interest rates rise

Whether or not the housing market will change as the recession becomes real 

The long-term and short-term investment opportunities for real estate investors

Investment property niches and which have the highest ROI in today’s housing market

Are single-family homes still worth buying, or are they far too overpriced?

How to avoid the trap that 95% of real estate investors fall into

And So Much More!

Links from the Show

BiggerPockets Forums

BiggerPockets Agent

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Find an Investor Friendly Agent in Your Area

Dave’s BiggerPockets Profile

Dave’s Instagram

Henry's BiggerPockets Profile

Henry's Instagram

Book Mentioned in the Show

Real Estate by the Numbers by Dave Meyer and J Scott (Use Code “DAVE” or “JSCOTT” for 10% Off)

Connect with J:

J's BiggerPockets Profile

J's Website

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-42

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page!

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The 2020-caused supply chain shortage went from bad to worse over the span of just a month. By the summer of 2020, builders were facing massive delays, a lack of labor, and material prices that made new homes look almost comically unaffordable. Lumber skyrocketed in price, basic building materials sat on ships for weeks, even months at times, and subcontractors left to get paid more by working for themselves. Is this nightmare finally over for the new construction industry?

Joining us today is build-to-rent expert Chris Funk from Southern Impression Homes. Chris got into real estate investing around the same time as the last crash. He was buying foreclosed homes off the courthouse steps, then later built a property management company and a new development company he still owns and operates today. He realized that buying new build homes as rental properties significantly reduced his maintenance and management costs, without adding too much of a price premium.

Now, he’s working with investors across the nation to offer new-build quality at regular residential pricing to those who want a headache-free investing experience. But Chris doesn’t just supply the homes, he also works with investors to get property management set up from day one, so it’s as turnkey as can be. Chris gives his read on today’s market, what investors should look for before they buy, and whether or not our supply chain nightmare is over!

In This Episode We Cover

Why build-to-rent investment properties are a great option for the average investor

The most important metrics to look at when analyzing a real estate market 

Supply chain shortages, labor setbacks, and where construction companies stand in 2022

Price drops and how far new home listing prices could fall as demand dries up 

The risk of investing in a renter-only subdivision and why homeowner/renter diversity matters 

A crucial clause to look for when signing to buy a new build home 

And So Much More!

Links from the Show

BiggerPockets Forums

BiggerPockets Agent

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Find an Investor Friendly Agent in Your Area

Dave’s BiggerPockets Profile

Dave’s Instagram

Kathy's BiggerPockets Profile

Kathy's Instagram

4 Vital Points to Consider BEFORE Getting Into New Construction

The FRED Producer Price Index

Connect with Chris:

Chris' Website

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-41

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page!

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Housing demand has caused home prices to explode over the past two years. But, even as interest rates rise, the Fed tries to curb inflation, and would-be-homebuyers enter back into the renter’s market, there still isn't enough land to go around. For developers like Tommy Beadel, this is a good problem to have. On one hand, tailor-made homes for new homebuyers sell out quickly, but without a ton of deals to go around, where do you go to find good dirt?

Tommy is the CEO of Thomas James Homes, rebuilding experts in the Seattle, SoCal, Silicon Valley, Denver, and Phoenix markets. They do what most flippers won’t—buying old, often outdated homes, tearing them down, and rebuilding them to fit today’s standard. Doing this allows them to sell at the highest price to a consumer that only wants the best and latest home to buy. They skirt the line between new development and renovating/rehabbing homes, but this niche has paid off.

Unsurprisingly, Tommy came from a background like most of us. He attended a real estate seminar, surprisingly didn’t get scammed, and house hacked right out of college. His passion for real estate grew from there, taking him from the mortgage industry to investing and now building. But Tommy is convinced that his niche isn’t a cyclical one. Instead, it’s something he can rely on that will stand the test of time. He’s got the data to back it up, and you’ll hear all of it in this episode.

In This Episode We Cover

The “tear down, build up” style of new construction and why there’s so much demand for it

The property product-market fit and how today’s trends show what a homebuyer wants

Scalability vs. predictability and the most crucial aspect of growing a real estate business

What predicts a profitable housing market and the data you need to know before you invest

Material and labor costs and some good news for builders/rehabbers 

Entering back into a “middle-ground housing market” as sellers and buyers reach a stalemate

And So Much More!

Links from the Show

BiggerPockets Forums

BiggerPockets Agent

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Find an Investor Friendly Agent in Your Area

Dave’s BiggerPockets Profile

Dave’s Instagram

James' BiggerPockets Profile

James' Instagram

Where Does Housing Demand Exceed Supply?

Use NeighborhoodScout to Find Market Data in Your Area

Connect with Tommy:

Tommy 's LinkedIn

Thomas James Homes

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-40

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page!

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The Federal Reserve has spent the past year or so fighting inflation as hard as they can. They’ve raised the federal funds rates, resulting in a stunted housing market, higher unemployment, and more economic uncertainty as the fear of a recession becomes more real by the second. Their end goal is simple: control the cost of goods and services to the best of their ability, and they’re doing anything and everything to get there.

Last week, Jerome Powell and the Federal Reserve made statements that foreshadow clear economic impact. No matter what line of work you’re in, how you’re investing, or whether or not you even pay attention to the economy, you will be affected. This war against inflation has caused some serious economic backlash, but the worst may be yet to come.

On this Friday episode of On The Market, Dave takes some time to decipher what Jerome Powell (Chair of the Fed) meant by his statements. What type of economic impact can you expect over the next coming months, and how will real estate investing, interest rates, and returns be affected by this news? If you’re a renter, homeowner, or still shopping the market, this news directly affects you.

In This Episode We Cover

How federal funds rates indirectly affect mortgage rates rising and falling

Mortgage and interest rate predictions and how long we’ll remain in “high rate” territory

The Fed’s focus in the next few years and what they’ll do to ensure inflation declines

Housing market forecasts for 2023 and a glimmer of hope for buyers

The oncoming economic recession and how the Fed is building the perfect storm for unemployment

Bond yields vs. mortgage rates and how they too work in tandem

And So Much More!

Links from the Show

BiggerPockets Forums

BiggerPockets Agent

Join BiggerPockets for FREE

On The Market

Join the Future of Real Estate Investing with Fundrise

Connect with Other Investors in the “On The Market” Forums

Subscribe to The “On The Market” YouTube Channel

Find an Investor Friendly Agent in Your Area

Dave’s BiggerPockets Profile

Dave’s Instagram

Housing is Unaffordable, But Could It Actually Get Worse?

The Fed Basically Admitted It. They Want a Housing Correction

Read Jerome Powell’s Full FED Transcript

Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-39

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page!

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