The David Greene Show
Buying, Selling, Holding - Episode 7
Sep 16, 2024
Explore whether housing prices will drop during an economic slowdown—hint: it’s complicated! Learn how supply and demand, not just economic conditions, maintain stability in home prices. Discover how falling interest rates can actually increase demand and transactions. Dive into the difference between Return on Equity (ROE) and Return on Investment (ROI) and how to intelligently redeploy capital for better returns. Plus, hear insights on house hacking and get tips for navigating the current real estate market!
32:09
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Quick takeaways
- Home prices are primarily influenced by supply and demand rather than solely by economic conditions or interest rates, ensuring stability even during downturns.
- Investors should differentiate between Return on Investment (ROI) and Return on Equity (ROE) to optimize their portfolios and capitalize on appreciated assets effectively.
Deep dives
Navigating Market Dynamics
Understanding the relationship between supply and demand is crucial in real estate. An influx of inventory typically leads to a drop in home prices, which can occur during economic downturns when sellers must compete to attract buyers. However, high demand can sustain prices even when the economy slows, leading to the misconception that falling interest rates will automatically result in lower home prices. Investors need to focus on the balance of available inventory relative to buyer interest to gauge real estate market trends correctly.
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