The real estate market in North Texas is finally finding some semblance of stability, as prices level out and fierce bidding wars subside. This is obviously good news for buyers, as rates have remained solid and inventory creeps up. Sellers, on the other hand, retain the benefit of a massive equity build-up over the last couple of years, putting those looking to sell in a solid position even without multiple offers. So where do investors fall in this shifting market? There are more opportunities ahead.
In a market where prices are increasing, it’s difficult to find deals because everyone is trying to buy and capitalize on the appreciation. In a flattening market, there are more properties available for purchase as sellers become more realistic about their pricing. This provides opportunities for investors to get into the market at a lower cost basis and still see potential appreciation as the market turns around.
In addition, a flattening market gives investors more time to do due diligence on properties before making an offer. In a hot market, there are often bidding wars and multiple offers, which can lead to hasty decisions and overpaying for a property. When the market is calmer, investors can take their time looking at different properties and make sure they are getting the best deal possible, and finding portfolio fit.
It’s also true that, while distressed property opportunities may not have been as plentiful the last couple of years, they’re still a steady stream for deal flow and institutional investor that operate on very low margins have decreased buying as rates have jumped up, giving individual investors willing to put in the time and energy to find solid deals a massive edge.
Stable markets tend to provide more opportunity across the board, as exuberance subsides and rational thinking takes over. Investors acting out of emotion or not acting at all for the last 24 months will find much more latitude in their ability to find and structure deals.
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