Can you spot an incoming real estate correction or downturn? In this post, we’re talking about economic signals from the data that suggest a downturn, correction or a crash. And, real estate crashes or corrects are a fantastic time to make a profit, so don’t be fooled. There are ALWAYS opportunities in real estate investment.
1. Home prices. Rapidly increasing home prices can be a warning sign of a potential real estate crash. If home prices rise too quickly, it can become more difficult for home buyers to afford a home, which can lead to a decline in demand and ultimately a decline in prices.
2. Housing inventory. A lack of available housing inventory can also contribute to a real estate crash. If there are not enough homes available for sale, it can lead to a bidding war among home buyers and drive up prices. However, if the supply of homes begins to exceed demand, it can lead to a decline in prices and potentially a real estate crash.
3. Mortgage delinquency rates. High rates of mortgage delinquency can be a warning sign of a potential real estate crash. If a significant number of homeowners are unable to make their mortgage payments, it can lead to an increase in foreclosures, which can put downward pressure on home prices.
4. Interest rates. Rising interest rates can also be a warning sign of a potential real estate crash. Higher interest rates can make it more expensive for home buyers to obtain a mortgage, which can reduce demand and lead to a decline in prices.
5. Economic growth. The overall health of the economy can also impact the real estate market. A recession or other economic downturn can lead to job losses, reduced incomes, and a decline in demand for housing, which can contribute to a real estate crash.
If you’re ready to learn more about real estate investing, get started today with real estate coach and attorney Brian Gormley! Brian has created his real estate masterclass, available on demand, for the beginning real estate investor. Get started today!