Despite a Cooling Real Estate Market, Billionaire Grant Cardone Predicts Investors Will Come to the Rescue

Billionaire Grant Cardone Predicts Investors Will Come to the Rescue

The real estate market is a key indicator of the health of the economy, and when it's in a slump, it can have a domino effect on other industries. The current market conditions have left many homeowners, buyers, and investors feeling uncertain and hesitant.

Buyers are looking for deals, not wanting to pay full price, and sellers have been, thus far, reluctant in taking less for their home than what they "feel" it's worth - especially after the big runup most local US housing markets saw during the pandemic.

Housing prices sticky on the way down

There's always an emotional component to buying or selling one's home, so prices are usually "sticky" on the way down.  It's a hard pill for most to swallow that you're going to get less for your home today than yesterday, so the natural tendency is to wait "in hopes" that the "perfect" offer comes in.

In an appreciating market, procrastination can be your friend.  In a depreciating housing market, price reductions may not even keep up with or get you out in front of falling prices.  There's always a lag between what's happening on the ground today and when the data is released, so we must use data, not our emotions, to project out future possibilities and probabilities to better guide our decisions.

Housing inventory supply and demand stalemate 

The emotional dynamic is even more in play today because housing inventory levels remain historically low which is strongly overshadowing the increasing headwinds in the residential housing market.  In particular, affordability continues to erode as the Fed remains steadfast in raising interest rates to fulfil their promise to do whatever it takes to curb inflation.

Watch what they do as it will clue us in and significantly impact the direction of the market.  As long as they remain restrictive in their policies, that will force a continued cooling of the housing market (again, with a lag effect when it comes to their policies actually impacting home prices).

Until then, there's a stalemate unique to this housing market that we didn't see back in 2008.  Since many potential sellers locked in 2-4% mortgage interest rates over the past few years and their home is worth substantially more today, they don't have to sell.  And, in most cases, they're not as they'd have to buy less of a home (due to the price appreciation over the last few years) and do so with mortgage interest rates now over 6% (resulting in a significantly higher monthly payment).

Ultimately, the erosion in price will come when this stalemate breaks.  For now, the bulk of the housing market is made up from "transactions of necessity" (people having to relocate for work, family circumstances, etc.), so most local housing markets are seeing falling prices, but they aren't dropping as quickly or as much as some expected.

What will the spring housing market bring us?

In fact, in many local housing markets, there's been an uptick in demand this early spring, but there hasn't been a flood of homes hitting the market.  With spring approaching, how this plays out will also give us a better feel for what's to come.

Will we see the typical seasonal trend of an increasing number of homes hitting the market this spring?  And, what will happen with buyer demand if interest rates keep rising?  Even though buyer demand has dried up considerably, the right home, in the right market, is still selling with multiple offers - the Sacramento real estate market is one such example highlighted by Ryan Lundquist a Sacramento appraiser and a great follow on Twitter - @SacAppraiser).

Inventory levels are key to 2023 home prices

Again, the key to 2023 home prices is seeing what unfolds with inventory levels and buyer demand.  As it sits today, these historically low inventory levels are keeping the housing market propped up to a large extent, so it will take time, but billionaire investor and entrepreneur Grant Cardone believes that investors will play a vital role in reviving this slowing real estate market when that time comes.

Economists have been calling for a housing crash for several months. Some even predicted that home prices would fall by as much as 30% in 2023. While these claims are understandable considering that rising mortgage rates have priced many would-be buyers out of the market, it appears that a different scenario is beginning to play out.

Best-selling author and real estate fund manager Grant Cardone agrees that the housing market is in trouble, but points out that investors will create enough demand to keep the market from crashing.

“Banks don’t trust borrowers, and those they do trust will have to pay. This will move homeowners to the sidelines and slowly reduce home prices,” Cardone said. “Investors will step in to pick up single-family homes at lower prices with less competition. That being said, there will be no housing crash! Investors, like myself, will save the day and step in to buy the homes, put renters in place and enjoy them for the cash flow, not the kitchens and cabinets.” - Yahoo! Finance

Unlocking the Secrets of Success in Real Estate Investing: Insights from Brandon Turner

Real estate investing is a popular choice for many people looking to build wealth and secure their financial future. However, despite its potential rewards, the majority of people who venture into this field fail to achieve their goals. Why is this the case? What are the keys to success in real estate investing? In this blog post, we delve into these questions and more as we explore the video "Why Most Won’t Succeed in Real Estate Investing with Brandon Turner."

Who is Brandon Turner?

Brandon Turner is a well-known real estate investor, author, and educator. He is a co-host of the BiggerPockets podcast, a popular resource for real estate investors, and has written several books on real estate investing. In the video, Brandon provides valuable insights and advice on why most people fail in real estate investing and how to increase the chances of success in this field.

Real Estate Education and Preparation

One of the key takeaways from the video is the importance of education and preparation. According to Brandon, many people jump into real estate investing without fully understanding the risks and rewards involved. To succeed in this field, it is essential to educate yourself on the various investment strategies, as well as the legal and financial aspects of real estate investing. It is also important to have a clear understanding of your goals and what you hope to achieve through your investments.

Discipline and Perseverance to Become a Real Estate Pro

Another important factor that Brandon highlights in the video is the need for discipline and perseverance. Real estate investing is not a get-rich-quick scheme, and success in this field often requires hard work, patience, and persistence. It is important to have a long-term outlook and to be willing to weather the ups and downs of the market.  

The Magic Happens When You Put in the Hard Work

This is key.  It requires work.  Deals don't fall on your lap while you're sitting on the couch hoping for something to role your way.  Most people are drawn in because of the potential "rags to riches", but don't realize real estate doesn't turn into a "money tree" without tilling the ground, planting the seeds, and nurturing the seeds until your trees mature enough to bare fruit.  Again, this doesn't happen overnight.  Once most realize this, they move on and lose any shot at living up to their potential. 

Networking and Building Relationships to Build Your Real Estate Business

In addition to education and perseverance, Brandon also stresses the importance of networking and building relationships in the real estate industry. Having a solid network of professionals, such as real estate agents, mortgage brokers, and contractors, can help you make informed decisions and find the best investment opportunities.

Take Action

Finally, Brandon emphasizes the importance of taking action. No amount of knowledge or preparation will lead to success if you don’t take the necessary steps to put your plans into action. Whether it's finding your first investment property or expanding your portfolio, it is essential to take calculated risks and be willing to put in the effort required to succeed.

This BiggerPockets video, "Why Most Won’t Succeed in Real Estate Investing with Brandon Turner" provides valuable insights into the keys to success in real estate investing. From education and preparation to discipline and perseverance, to networking and taking action, Brandon provides a comprehensive overview of what it takes to succeed in this challenging but rewarding field.

Remember, none of this becomes a reality without taking what you've learned and putting it to use.  Again, the magic happens in the work.  Doing the small things and building the good habits.  Doing this consistently is no secret.  The secret is most won't play the long game to achieve their goals, but I trust that won't be you!

Risky ... Really?

I don't get it. Now, don't get me wrong, putting together all of the pieces of a puzzle to get the full picture, to understand the entire story, is not easy and is usually a constant struggle. Specifically, I'm talking about Real Estate, but my comments would suffice for most anything that cycles.

Why is it when everyone should be buying real estate at bargain basement prices, only a few are while the overwhelming majority don't have the means? The easy answer is that times, economically speaking, are tough. I get it, people are losing jobs, loans are much tougher to obtain, most everything financially speaking has gotten tighter aside from the drastic drop in oil and gas prices over the past few months.

Again, why do most people find themselves confronted with these unfortunate circumstances? I thought the safe play was to simply get a 9:00-5:00 job, put your money in the bank, work until you're 72, and then call it a day. After all, investing is risky in lieu of the safety of that weekly paycheck. Right?

For me, this is where the confusion sets in. Most people don't involve themselves heavily in investing yet they spend forty plus hours a week working. For what? In terms of financial security, if this was the best, least risky approach, how come most of these same individuals are not financially independent after countless hours, days, years, and decades of hard work?

Someone should have told the likes of Warren Buffett, Bill Gates, Richard Branson, etc. Sure, I get it, these guys are different, simply ordained by a higher power to find themselves in a position of being rich (again speaking strictly in terms of finances) or, perhaps they've spent the time, devoted the effort, and dedicated their passion learning to become the best. Oh yeah, that little thing called education.

I guess if you want to have what most everyone else has (again, financially speaking), I would urge you to do what most everyone does. Otherwise, I'd spend a lot of time looking for another way. Yeah, the road less traveled. It may be a bumpy ride along the way but your travels will often leave you finding yourself alone in vast fields full of trees loaded with fruit waiting to be picked. Or, you could wait in line at 3:00 in the morning outside of your favorite store during the Holidays hoping that in a matter of hours you'll have the opportunity to fight with thousands of others to potentially get one of the five flat screen TVs advertised for half off.

Are you sure investing is risky? Scarier perhaps, but definitely not riskier than that secure 9:00-5:00. Yes, you may lose money on your investments as easily as you may get that pink slip. Don't believe me, just look around you. There's a better way but you have to spend some time looking, learning, and being. How can you afford not to?