I haven’t written a Real Estate Philosopher in a bit since I try to only write if I feel I have something useful to say – and I do now – so here goes. It is pretty simple and straightforward:
Buy Real Estate Now!
Right now from my catbird seat at one of the largest real estate law practices in NYC – coupled with my work with clients helping them on the business side, I see just about everyone doing the same thing, which is not doing deals.
Everyone – well almost everyone – is saying they are nervous about the Fed and interest rates.
Okay – of course they are. But no one has a crystal ball about interest rates. Going back about 15 years, people predicted interest rates would rise every single year and were wrong. Now suddenly everyone knows what will happen.
In a word – hogwash!
No one knows what will happen to interest rates.
And the news is reporting there could be a recession – how about that worry?
Meanwhile it looks less likely we will have a recession and more likely the Fed will keep interest rates. The opposite of how it looked last month.
The thought that someday – soon maybe – there will be a magic moment when you breathe a sigh of relief as everything will become clear. You will know the direction of interest rates and the economy. That is not going to happen and even if you think it has happened you are kidding yourself into a false sense of security.
There are certain things that are always going to be unknowable. Yet you still have to do business.
By the way, in case you don’t think I have a point, consider The Wall Street Journal’s articles from the past few months worrying about a recession as the Fed raises interest rates. How many articles were there to that end? An awful lot. But then a recent headline was:
“Could a Recession Still Be Years Away? Steady Growth, Moderating Inflation Improve Odds of Extended Expansion”
You can see where I am going here. My point is that if you aren’t doing deals right now, then you are timing the market. And that doesn’t work over a long period of time.
You cannot predict macro events like interest rates; however, the goal should be to outperform on a long-term basis, and it is pretty clear to me that if no one is in the market except you, the odds of you crushing it with future returns are much higher than usual.
As a cautionary note – I would never suggest you deviate from careful underwriting and due diligence. This is not a scribe to throw caution to the wind. My call to action is instead of pausing whatever you normally do, just resume normal business operations.
So, if you are sitting on the sidelines, this Real Estate Philosopher urges you to get back in the game.
Bruce Stachenfeld aka The Real Estate Philosopher®