The "Bad" Real Estate Market

So I was out having lunch with a friend last weekend. As we were talking, I mentioned that I was beginning a career in real estate. She did the classic “Oh. That’s nice.” response and then said what most of my friends say when I tell them I’m working in real estate: “Isn’t the market really bad right now?” Since I’ve been getting that response a lot, I figured I’d clarify once and for all.

One of the first things that I learned while taking courses at Brooklyn Real Estate Institute is that it doesn’t matter so much if the market is good or bad, it’s all about reading the market. If you know how to read the market, you can figure out which way prices are going and plan your strategy accordingly.

The Good
This one is easy. If the market is good, prices are stable or going up. People are building, buying, and selling property. Banks are lending. The key here is to not get lured into ridiculous purchases. Being able to gauge the value of a property is essential to avoiding the euphoria of a “good” market. At Brooklyn Real Estate Institute, they taught us to identify key factors influencing a property value, including how to analyze current and past listings. We learned how to read an appraisal and how to recognize when the appraisal might be more or less than what you can expect to get for the property. Using these strategies, I can avoid investing in a property that isn’t likely to give out a return.

The Bad
Just because prices are falling, doesn’t mean you can’t make a profit. In fact, the mass hysteria caused by a “bad” market can actually help you make money. At Brooklyn Real Estate Institute, we learned that emotions play a heavy role in the decision to buy or sell property. Fear and worry can cause people to sell for less, especially if they are anxious to complete the transaction. Picking up a property at a great price and holding onto it until the right moment can be a great way to cash in.

Another option to make money when the buying market is struggling is to focus on commissions from rentals. If the market is bad, people sometimes turn to renting because they don’t feel good about purchasing a home. As rental demand increases, there’s plenty of opportunity to rake in on commissions.



The Ugly
Of course, the only truly ugly market is the one that you can’t predict. Thanks to my courses at Brooklyn Real Estate Institute, I can recognize where the market is and see clues as to where it is going. This lets me make money no matter what the market is doing. That’s why I love real estate!