Yes, I admit it. I am scared of a real estate bubble. But I’m continuing to invest anyways. Here’s why.
Over the past several years, I’ve heard the following claim consistently made by investors both in my home market of Denver and nationwide. It seems by far to have been (and continues to be) the most popular prediction made by investors, both experienced and novice:
“The market is probably going to [reset/correct/crash/fall/decline/etc.] over the next 18 to 24 months.”
Pundits have predicted a price squeeze or bubble that was two years out on average every year for the last six. Don’t believe me? Check out article after article from basically every major media outlet in the United States predicting a bubble at some point in the last eight years. I’ve even compiled a sampling for your reading pleasure below:
2013:
2014:
2015:
2016:
2017:
2018:
2019:
2020:
2021:
I could go on.
How Long Are You Willing to Wait for the Impending Market Crash?
If you believe that a market crash is coming, you are either right—or else you might be waiting a long time to get started in real estate investing. People were waiting for the next crash in 2013, 2014, 2015…and every year since up until now.
Oh, and of course, there were just as many equally well-written and well-researched opinions talking about the housing market’s great health and future growth. These bullish opinions are just as prevalent today. I could easily compile a list of housing market bulls to complement the bears I posted above.
But the point is that I’ve heard about an impending market crash throughout my (admittedly short) entire investing career.
Let me ask you this: When the next crash comes, will prices drop below 2013 levels? Below 2015 levels? Below 2017 levels? How much do those waiting for a crash stand to gain by waiting it out, and how much will those who own property today lose?
How low do prices have to go to eliminate the gains of the last eight years here…