In the mid 2000s when I was a novice real estate investor and looking for easy to rent beachfront properties in a family friendly complex, I was berated by nearly every Realtor I met when I suggested the real estate market was overheated and had formed a full fledged real estate bubble. When I hesitated, questioned, and/or outright said “you got to be kidding” after hearing their sales pitch, they countered with the standard statement of the day:
But this market is so hot!?! You’re crazy for missing out this!
And look where we are now…
(I would imagine foreclosure heavy cities like Las Vegas, Miami, etc., look similar or worse.)
In less than a decade, Zillow’s home value index for the Myrtle Beach, South Carolina, area skyrocketed more than 100%, and anyone who bought into this herding psychology nonsense, has lost around 50% of their equity investment in their property proving that, unless you planned on flipping your real estate investment(s) for a quick profit, that the best way to play the red hot real estate market was to do nothing at all.
But now that this particular market has gotten somewhere close to baseline and/or long term trendlines (difficult to tell from just 10 years of data), and that the Federal Reserve has tipped its hand when it will stop buying U.S. Treasury Bonds (at least in the short term) sending interest rates on an uptrend, is it time to start sniffing around for bargains and consider jumping back into real estate as a vulture investor?