It seems like a precarious time in the markets: RE, stock, interest rates, wages, etc...

Interest rates rising

Apartment and Home over-building/excessive in many areas

Wage increases looming/companies desperate for workers

RE markets frothy in many/most areas

Rents frothy in many/most areas

Lenders loosening lending standards again

Political turmoil and mid-term elections looming

So, where do we go from here? Your thoughts?

Our motto? We buy houses.

'Round here many of the "better areas" have somewhat relaxed the zoning regs [still need full-blown Planning & Zoning permissions] resulting in many older post WW2 era suburban homes on larger lots are being bought, torn down and the lots split. These areas are often fully built out. These towns will reap a "double tax" on more valuable homes.

It does seem that the apts./condos are being overbuilt on the general area, but time will tell. In our immediate area we still a military installation that has been for sale for over a decade and is slowly being absorbed but the potential for a lot more housing is on a distant horizon.

I do not see that the mortgs. are being relaxed too much but prices are very 'rate sensitive' from what I can tell. Only Gov't Agencies are the ones pushing ownership for a class of Buyer that could never get funding in the open market, so these projects are doomed in the long term.

Locally rents are REALLY frothy [to me at least]. At our last turn I raised the rent by 175.00 and felt that it was pretty aggressive. Come the following Spring I discover that we were "under" by another 100. That's just over a year ago. Now the # of SFH in our Town is less than 5 and these are priced for the "group rental by the room".

Even Towns that were once much cheaper than ours now have prices in the sky....and seem to be getting it though I cannot tell for sure.

Each recession [4 we have seen] has resulted in a new, higher platform in prices for for both owner-occ. & rentals. Many older apt. complexes are doing extensive repairs & upgrades.

The loose lending is the worst. That's what crashed the economy in 2006. If we can keep the current congress, we can deal with the lending issues. Now fuel is cheaper. During the last lending mess, there was an oil shortage due to some refineries going under water and I believe Venezuela was still using our Florida refining capacity entirely. They have no refining capacity which may account for the mess they are in along with the socialism. Also we were in Solar Minimum when it was very cold and more fuel oil was needed. We are back in Solar Minimum but, as I say, we have no fuel problems except the Saudis are charging a bit more than last year.

JB,

There are always troubles, they just move around.

Learn to make money in the bad times. Fortunes can be MADE in bad economic times. Adapt.

These "scary" interest rates increases are comical to me. I was new and buying when rates hit 20%.

DEBT is what kills LLs. Been there. Watched 6 local well established LLs go belly up, one even lost his house. Eliminate debt and these media reports sound like toddlers whining.

I agree with Brad. Debt increases risk, equity decreases risk.

Right at the time we bought our building in 2014, big developers started building mega aprtment complexes in our area. I was worried about the impact on rents. Hubby and I did some mystery shopping. Even half empty, these complexes were 100s of dollars more in rent for a comparable apartment. We raised our rents, marketed the GREAT VALUE of our remodeled apartments and "small, friendly community" versus the new construction. I still like to drive by the complexes at night, so I can see how many units are vacant. We stay 100% full with low hassle tenants. Our ROI has to be better than these huge, half empty new complexes with their high debt loads. The new complexes are also charging tenants extra for covered parking and storage -- something we offer without charge.

Know you competition. There is always a way to compete.

We buy houses.

We sell houses.

We rent houses.

Interesting.

I too do not put much emphasis on news or noise, but I also understand that external forces put pressure on some businesses and affect many parts of the economy and other markets.

@ Brad, "Learn to make money in bad times." I was lucky enough to purchase three fourths of my units between 2009 and 2012 so I believe that would qualify.

RathGal, I think you have perfectly defined your market.

@ Frank and Small potatoes, I also cannot see how higher interest rates do not have a downward effect on RE prices. All things being equal it could really be no other way.

JB,what you mean by FROTHY,like in Starbucks or McDonalds...........charlir............Miss Ally,you made 10% Wow thAts good,wish I could do that......................

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surge in IN-LAW buildings. NH has passed state law so Towns cant zone them out

I don't know whether anyone reported it but I have witnessed how young teni do not want to live in groups as they used to. Mostly because they care poor money managers.

Their solution is to pay more for a single apartment. Again, the solution highlights that they don't manage money well.

If I were to buy a home, I would not buy larger but rather smaller with the potential to build in more private bathrooms.

JB, you're right that higher rates "should" push down home prices, but not always.

For instance, guys like me who buy with cash. I don't worry about interest. Pay what I want to pay and that's that.

Also, for guys who do use loans...1% hike on $100,000 is $1,000 per year or $83/month. That's not going to slow things down too much.

Once we get north of 7-8%, we'll start to see some slow down. But the economy is flush now. Flush with buyers who have been hiding since 2008. A whole decade of folks renting/living in mama's basement. They're out now, bidding on and driving up the price of houses.

Also, big tax cuts are offsetting higher interest rates.

Govt loans are now being made to 1st time buyers with credit in the low to mid 500s. Yikes! Looks like Uncle Sam is creating my next buying opportunity.

As others have said, there really aren't any bad economic times: there are simply changing economic times. The laws of supply and demand are immutable, although folks like to think they can hijack them for the short term. Money will flow this way and that. People will make unwise decisions and will lose a lot. Be ready to help fix that problem when the money starts to flow the opposite direction.

Read "The Richest Man in Babylon" by Clason some time. It's a free download in PDF format. It's a bit dated, but an excellent source for how money always has and always will work.

In my area, DEMAND for housing and EMPLOYMENT determine the rent amount, since SUPPLY is not keeping up.

I think loans are still being well underwritten. IDK I'm seeing a lot of froth in the rental market, a bit on the house side but really not that much.