How to quickly analyze real estate market timing charts
I received a very good question today regarding the real estate market timing charts at REMarketStats.
JP asked:
“There’s no doubt in my mind that timing emerging real estate markets can be super profitable, and your indicators are great. The problem I have is this…
To determine the next emerging markets, I would have to study hundreds of charts every month. Is there some easier way to do this?”
JP asked an excellent question and I wanted to share my answer with everyone.
In fact, there is an easier way to make use of the real estate market timing charts. Certainly the first couple of months will take a bit longer no matter how many charts you look at because it takes a bit of time to become comfortable with analyzing them. The training videos on the REMarketStats site certainly will help you to learn how to analyze the real estate markets. In fact, I can read through the 230 or so charts in about 3 hours now because I’m used to looking at them. So definitely over time it will get quicker.
But more importantly, it really isn’t necessary to look at every single chart. It will depend some on your investment criteria but what you’ll probably want to do is to keep a “watch list” of markets you are interested in. That way each month you can just look at the charts that meet your criteria. It will go much, much quicker that way.
For example, a market like Flint, Michigan or Dayton, Ohio probably wouldn’t be on your watch list unless you live in that area or you are buying purely for cash flow and not appreciation, because even when the indicator data is up in those markets the appreciation rate isn’t nearly as strong as in other areas.
Also, some markets may have entry price points that are just too high for you to want to invest in, even if the home prices appreciate quite well when the indicators are up. Markets such as San Francisco or Washington DC are going to be much too expensive to cash flow or even have a low negative. If having positive cash flow or at least break even cash flow is high on your priority list you can also take those types of markets off your watch list.
Other criteria to consider are markets that are in population decline. For the most part you probably won’t see these markets having significant appreciation rates any time soon.
Once you establish your criteria and then put together a watch list you can probably review those markets each month in about 1 hour, which really isn’t that much time at all. If you can spend only 1 hour per month to determine the best real estate markets for you to invest in, isn’t that time well spent? Especially since it can make you tens of thousands of dollars more in profits per deal.