MARKET & TRENDS
MARKET SLUMPS
The Possibilities and Perils of Investing in a Downshifting Housing Market THERE WILL BE BUYING OPPORTUNITIES IN 2023, BUT EDUCATE YOURSELF ABOUT THE POTENTIAL RISKS OF BUYING WHEN THE HOUSING MARKET IS DOWN.
by Daren Blomquist
ith a recession looming and home prices predicted to fall
estate investors across the country to buy bank-owned (REO) properties at auction. “When you’re looking at (auction) reserve and you’re looking at what current market value is, the margins have shrunk tremendously.” PRESSURE ON PRICES The California-based investor said he expects markets with some of the biggest runups during the pandemic to be most at risk for a home price correction in 2023.
“I think Boise will get walloped. I think Maricopa County (Phoenix) will get walloped. I think Florida will get walloped,” he said. “Central and southern Florida are just overpriced. “The values that the banks are coming up with aren’t real. They aren’t today’s values. Today versus a few weeks ago is night and day,” he continued, referring to the REO auction reserve, which represents the minimum amount banks are willing to sell a property for. “In 90 days or so it could be a lot better if banks come to their senses on pricing.”
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in many local markets, 2023 could represent a prime buying opportunity for real estate investors, assuming those investors account for the potential perils of buying during a housing market downturn. “I’m still buying heavy, but it’s harder to find the properties. You just have to search more. But there is a lot of money to be made,” said one California-based real estate investor who partners with local real
42 | think realty magazine :: january – february 2023
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