Real Talk # 323: The Crystal Ball (Part 2)

So what does the future hold for you? 

As I gaze deep into the Data, I see that we are coming to a crest of this upswing real estate cycle that has lasted nearly 7 years now. That much is a given by almost anyone who spends anytime at all watching the wind blow, whether from the shoreline or in the midst of the sea (as I am). The mystery lays in the timing of the next downturn, this is the question that everyone seeks the answer to, but THIS IS THE WRONG QUESTION!

The right question is;

“Given my unique circumstances, the resources I currently have and my past experiences, what is the wise thing for me to do now?”

…..regardless of the exact timing of the pending cycle downturn!

If you are happy in the home you currently live in and can afford that home even if the income was to recede in a recession by 10 to 20% then I would stay put.

If your finances are tight or if you plan to move in the next 1 to 3 years then I would consider scheduling some time to consider your options in the very near future. 

If you own rental properties that are producing income free and clear of expenses of greater than 6% then I would continue to hold them as long as they do not represent a threat to your balance sheet in the event of a moderate correction. Lowering leveraged positions would be similar to battening down the hatches prior to entering rough waters. 

If you have been fortunate enough to own multiple income producing properties then this would be an excellent time top grade your portfolio by selling off the less desirable properties and wither paying down debt or upgrading from single family to multifamily units for more diversification and more reliable cash flow. A portfolio review would be the wise thing for you to do in this season. 

In most cases if you do not own a personal residence and plan on staying in the same area for more than 3 years (in California at least) it will make sense for you to purchase a home. However it would be wiser to learn your limits in advance and perhaps to purchase less home then you can actually afford.  

I would love to know your thoughts and hear your predictions for the future in Real Estate. Pay us a visit and leave your comments on The Mathis Team Facebook page!

About Barry Mathis

Barry Mathis "Broker Barry" has over a decade of experience in the local Real Estate Market. As an active Broker who is personlly involved in the current market , he brings a unique perspective to his advice and his actions. He has ridden the wave of Real Estate from the lows to the highs and back to the lows and now is perfectly position to guide you in this new rising market. His experience as a senior member of a high volume sales team and later as the Broker/Owner of an Intero Franchise has given him a view into thousands of transactions. Most recently he launched and operated one of the fastest growing Property Management companies in northern California , untll its sell aat the end of 2012 The lessons learned in over 1200 + real estate transactions have provided him with a depth of knowledge that simply cannot be learned any other way.Barry knows what it takes to get it done in Real Estate. He has invested in both commercial and residential Real Estate, sometimes for a quick flip and but more often for longer term buy and hold positions. He is a Certified Distressed Property Expert.
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