Finding the best markets for apartment deals is always top-of-mind for the apartment wholesaler. Life is easier, deals go through. But … there’s a crash coming in the real estate market.
Soon. And everything will change.
In fact, it’s overdue, it should have happened already. Since 2000 the money printers at the US Federal Reserve have been injecting liquidity into the economy, artificially inflating real estate prices, really kicking into high gear in 2009 with QE (“quantitative easing”) to stave off the market correction that is trying earnestly to happen.
Where are we today?
If you need a sign, 220 Central Park South, an apartment in NYC is selling for $250M, and has a buyer. Think about that for a second. It is more than double the previous most expensive NYC apartment sale. It may be a signal the run-up in prices that has been going unabated since 2009 is nearing it’s end.
Market tops are always hard to pick. Everyone is used to how things are, and no-one wants them to end. But here we are at the tippy tip top of this real estate bubble market. Prices are incredible, and there is simply no connection to any fundamental economic forces related to demand that would cause house prices to increase further.
The “only” thing keeping real estate prices where they are is the determination of the Federal Reserve Bank to keep interest rates artificially low by printing money.
Before too long, that won’t work either … and down we go! Read more…