Market & Trends
It’s Time to Toss Your Market Model IF YOUR ANALYSIS STILL PRIZES THESE THREE METRICS ABOVE ALL ELSE, PREPARE TO BE OUTMANEUVERED.
BRUCE MCNEILAGE
H istorically, three economic factors were nearly axiomatic when it came to predicting the relative soundness of a real estate market. If a region could boast a net positive immigration number, a rising number of jobs and employers in the area, and a sound, relatively recession-resistant local economy, then it was deemed a “safe” market for investing in real estate. Ultimately, the “Classic 3” would nearly always trump any other factor occurring in a market when it came to predicting the soundness of an investment in physical property. Of
A NEW TAKE ON INTEREST RATES It is a known fact that interest rates affect our industry. That is not in dispute. However, because real estate investors tend to be extremely creative and are trained to work around problems rather than bulldoze through them, conventional wisdom tends to lead us away from confronting the very real impact interest rates are having on our ability to generate positive returns in a predictable way. To make matters more complicated, the COVID-19 pandemic and associated government-run battle to suppress
course, every investor still needed to do some basic due diligence, and bad numbers could turn the best deals sour overnight if the local or national economy experienced so much as a twinge. In 2025, simply relying on the tried- and-true processes of the past will be a recipe for investing disaster. Serious real estate investors must consider two additional economic factors when evaluating a potential investment for viability and profitability. This is especially true for those entering a new space in the industry or trying out a new strategy or a different market.
44 | think realty magazine :: march - april 2025
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