Supply and Demand

by Tim Herriage

Supply and Demand

by Tim Herriage

by Tim Herriage

This month is a crucial point in the 2010 real estate market.  Easter typically signals the beginning of the six strongest months in real estate sales.  Showings should increase, and sales contracts should begin to trickle in. So, here is the question you should ask yourself, “Will the recent surge/recovery continue through the summer?”

Real estate is driven by the basic economic principles of supply and demand.  Supply is something we have plenty of, and there are no signs of a shortage in the next 36 months.  Demand is the piece of the puzzle most people don't look at.  Whether you are a wholesale, retail, or long term hold investor, demand is the crippling factor most investors ignore. 

Demand is driven by liquidity.  Liquidity is measured by the available cash or credit in each specific market.  Demand is supplemented by incentives such as low rates and the tax credit.  It appears that the home buyer tax credit will be allowed to fade into the night, which will reduce the supplemental benefits one would have for purchasing homes this year.  If you analyze what is happening in the bond and t-bill market, it appears that rates may begin to climb.

I will talk more about this topic later in the month, but the bottom line is to keep a watchful eye on the demand for which ever product you are pursuing.  If rates spike, and the tax credit dies, this summer may not be as rewarding as it appears it will be!

Like I always say, I don't know everything, but that's just the way I see it!

See you online;

Tim

Tim Herriage
DFWInvestors.com
tim@new2020rei.wpengine.com
214.607.1227

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