For months, the so-called experts and gurus have been warning about the coming COVID-19 induced nationwide real estate market crash.
They point to these dire 'Fundamentals' as the reason why...
- Record high delinquent mortgages
- Record high unemployment
- Tenant Rent Strike
- Global Recession
- Tenant Eviction Moratorium
- Lenders tightening standards (or not lending at all)
Along with that, they also say the misfortunes of others will bring good fortune and amazing opportunities for wholesalers and flippers.
They're wrong on both counts.
First off...
A crashing market is never good for Flippers or Wholesalers
...buyers (and capital) disappear; you learn the hard way just how Illiquid real estate can become. Layer on top of that, declining real estate values and too much debt – there's no escape route. You end up going down with the sinking ship.
Secondly...
The crash they're predicting simply isn't in the cards right now
(Of course, markets always move in cycles and some local markets are already in decline. There ARE plenty of reasonable scenarios (a major Covid-19 shutdown this winter, for example) or other 'black-swan' events that could cause catastrophic market damage somewhere in the future.)
When a crash of the magnitude they're predicting hits, HousingAlerts will see it coming.
It'll be ugly for everyone else still relying on the Fundamentals; those so-called experts will likely be in the same foreclosure and bankruptcy lines as the millions of other investors.
The only way to survive a crash is to avoid it.
The only way to avoid a crash is to see it coming.
The only way to see it coming is with Technical (not Fundamental) Analysis.
I'm guessing you already knew about the nasty list of Fundamentals (above) affecting most U.S. markets, right?
...but you probably haven't sold everything and headed for the hills, yet... right?
Why not?
Probably it's because you just don't know what to do, what to think, or who to believe.
Or... maybe it's because you believe there are positive Fundamentals to consider...
- Record low interest rates
- $6 Trillion in Monetary Stimulus injected into the economy
- $2 Trillion in Fiscal Stimulus injected into the economy
- Exceptionally low housing inventory for sale
- Stock Market Rally
- Increase in YoY Purchase Mortgage apps
...and that's the problem with Fundamental Analysis – it's always a mental tug-of-war to see which one wins.
You can and you WILL convince yourself to choose one – typically the WRONG one - based on your own biases. (Usually it comes in the form of inaction; doing NOTHING.)
...and that, in a nutshell, is the problem with real estate Fundamentals: there's no science, no discipline, no back-testing, NO PROOF – nothing but a wild-ass guess that makes you feel "right" in the short term, but will clobber you in the long term.
That's why 'Fundamental' factors are so useless in predicting market cycles. It never gives you accurate, actionable decision triggers because it doesn't – and CAN'T -- track the biggest driver of all:
Market Psychology
When more sellers head for the exit door than new buyers coming in through the entrance door, real estate prices decline.
Then, more sellers head for the (now clogged) exit doors.
Real estate prices decline more.
Word gets out. Panic sets in.
One by one, individual local markets crash.
THAT is Market Psychology in action.
THAT is the ONLY thing you need to watch for: Changes in LOCAL Market Psychology.
THAT will tell you everything you need to know about your local market.
Technical (not Fundamental) Analysis is the ONLY way to track and monitor Changes in Market Psychology on a market-by-market basis.
It will be as plain as day when it happens in your market IF you've got HousingAlerts.
You don't have to be a gifted or extraordinary person to make generational wealth with real estate.
You just need access to extraordinarily useful data.
To your success!
Ken Wade
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