Comparing the 2019 Real Estate Market to ’07-’09
If you follow fix and flip trends within the 2019 real estate market, you have seen increasingly more articles and posts comparing the current 2018-2019 market to that of 2007, preceding the housing bubble crash and credit crisis of 2008 – ’09. Investors are encouraged by the bullishness of the current trend in the fix and flip market, while understandably concerned and cautious about similarities to 2007, especially if they were personally impacted by the crash. Once bitten, twice shy.
There are some key differences between now and then, so it’s good to understand them and to stay engaged with market changes. Keep reading the industry news, follow the real estate investment blogs, and subscribe to fix and flip blog feeds while looking at your local opportunities and networking with local real estate investment groups. Here are some recent articles and posts we have found well researched, and some local resources for networking.
Stay Informed With Real Estate Investment and House Flipping Feeds
This “Housing Market Headwinds” article from Ameriprise is a good summary of the current real estate investment market, from the perspective of 2007 comparison. There are some key points of encouragement here, stating that while mortgage rate trends in 2018 began raising concern about similarities to 2007, the strength of the current job market and increase of income is supported by high demand competing for low supply, providing a market where investors are more in the driver’s seat on the selling side. Particularly insightful in this article is the point that, “Homeowner equity as a percentage of a property’s value has been rising rapidly (at the national level) in recent years, as owners have been much more conservative around cash-out refinancing and other borrowing options.”
Within the context of larger real estate investment market trends, this “House Flipping Near Historic Highs” post from MPA provides Core Logic data stating that, “10.9% of home sales were flipped by the final quarter of 2018, just behind the highest level on record (11.4% in Q1 2018) and the highest level for a fourth quarter in the 16 years of record-keeping.” In other words, we’re in a uniquely favorable time for house flipping, with demand greater than supply and creating opportunity for investors to find sufficient profit margin between the under-valued homes and the buyers moving quickly to jump on at-value offers.
To stay engaged with industry news and trends, subscribe to Bigger Pockets if you don’t already. They also keep you sharp in best practices of fixing and flipping houses.
All of that said, experienced investors will tell you, don’t jump into your first deals thinking the bullish market will take care of your learning curve. First-time flippers nearly always take their hard knocks by under-estimating rehab costs, total costs and time frame of flipping. It pays to think local, and stay local, especially when beginning. Networking with local real estate investment groups and realtors will reap dividends in wise investment decisions.
In MM Lending’s markets of Louisville, Cincinnati and Indianapolis, here are some key organizations to join:
- Kentucky Real Estate Investors Association (KREIA)
- Real Estate Investors Association of Greater Cinncinnati (REIAGC)
- Central Indiana Real Estate Investors Association (CIREIA)
Reach Out to MM Lending for Experience and Rate Quotes in Louisville, Cincinnati and Indianapolis
Finally, feel free to contact us at MM Lending. We have been investors/flippers as well as lenders through the highs and lows of the market, so we have the local experience, knowledge of neighborhoods and interest in your success to give you experienced insights on your opportunities. If you are new or experienced in the market, you can only gain by getting pre-approved with a rate quote from MM Lending at no cost. Best wishes for successful flipping!