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Is the market going to hit an all time high in terms of value?


Mila
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I keep hearing about a huge increase coming in terms of land, property and housing value. Some are saying it can reach a record high. This can be great news for early investors but I am worried about the people who will not be able to afford housing if this happens. It will be good and bad, I suppose. Have you heard anything on this lately? 

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I watch my local real estate prices very closely. It has been crazy watching property values skyrocket. Things are getting super expensive. It has to do with a lot of different issues that are going on right now. We just have to remember what goes up must come down at some point. Everything will return to its mean. 

I know in the single family housing market large institutions are buying up the single family homes as rentals. Taking supply off the market which is driving prices up fast. 

With lumber going up in price so quickly building and renovating costs are going up. 

Home builders are no longer building smaller homes because it is hard to do so profitably. Investors like smaller homes as rentals as rent per sqft in the residential market does not scale very well. 

This is a big problem for people looking to buy their first home and renters as rental rates go up as property values go up. 

There are ways to combat this though if you are just getting started in real estate investing. I give the following book to anyone I know personally know looking to buy their first house: https://store.biggerpockets.com/products/set-for-life. When I read this book I wanted to go back and start my journey all over again as I never thought about finance in this way. Some sacrifice will need to be made but you will still be able to get yourself into real estate. Building wealth is a slow long winding road anyways :). 

The net is prices are going up. It is getting harder and harder to find deals. We have been through this before and everything is cyclical. So just have to keep your ear to the ground for opportunity while waiting for the next part of the cycle. A deal always can be found if you want it bad enough. 

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Around where I live, prices have stayed pretty low for the most part. But I have seen more and more properties go up in price. I think with the pandemic and people getting help from the government, we'll see a lot of prices go up because of it. I feel like that is the inevitable truth of it. If you want to get a cheap house now, it might be the opportune time to do so. 

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I like to house shop online, which is basically just looking at houses on the market and enjoying their architecture and features. I noticed the prices have gone up but not by as much as I expected. Houses are flying off the market SUPER FAST though! This is especially true for move-in ready homes and I suspect this to be investors buying them to rent them out. 

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