If You’re in the Right Places Real Estate is on Fire. If You’re in the Wrong Places Real Estate is a Fire Sale!!

Morning Folks!!

Next to domains my number one hobby is real estate. Just like I collect domains I collect real estate. And I noticed something this morning when I was going through the magazine called Luxury Home.

What I noticed was a change. No longer are most properties priced. Some had price upon request while a good percentage of them, more than I’ve ever seen in my life, say nothing about price.

There were few prices and here’s what’s happening. The market is so hot, and moving so fast that whatever price you put on today will be obsolete tomorrow. There is a parallel with domains too!!

I follow several markets in the United States and as much as 50% of anything that comes on the market is snapped up within the first 7 to 10 days now in these red hot markets.

For example in Asheville, North Carolina today on realtor.com in the last 72 hours, 36 homes have come on the market and nine of them are already under contract.

I have never seen anything like that in that part of the country ever before. 

In Boca Raton in less than 24 hours there were 36 new properties and three of them are already under contract. 

Now the rate in Boca is going to be slower than Asheville because you have much more choice and prices that are considerably higher.

So I’m going to dig a little bit deeper and go to 7-8 days. The percentage of sales of units on the market is 50%. That’s an incredible number!

I think typically it may be 5% or 10% if that. That is not a red hot market, that’s a white-hot market. And during that time the prices have gone up.

No when I go to 15 days it jumps even further to over 60%. 

When we hit the 21 day mark The sales are at 70%

Now let’s look at a different market. Let’s check out New York City. The number one disaster in America. 720 properties were listed in the last three days a total of six or under contract.

That’s nearly unmeasurable.  Less than 1/10 of 1%. Disaster! Prices are plummeting!!

It’s great for bargain hunters however depending which way things go it may or may not be a bargain. What it is is a bloodbath! It’s a race to the bottom. It’s a race to who could cash out first. It’s not a race you want to be involved in. Desperation for many!

Right now there are 1340 properties in New York City that are on the market for over $5 million. Very few pending. I found one I just happened to click on 381 days on the market.

Is there opportunity there? Yes but we don’t know if the opportunity is just beginning or there is much more opportunity to come?

Let’s face it, New York is broken. It’s broken! It may take a long time to fix. It’s not attractive to pay over 60% of what you earn to somebody else. Not only isn’t it attractive, but the way I look at life if you give more than 50% of your earnings to the government you are a slave my definition. You’re no better than a junior partner in that deal. NONSENSE! So between that and the pandemic, they are fleeing New York City in numbers that nobody has ever seen before.

When you buy now you buy through someone else’s circumstance.  They want to get out. They need to get out. They may sacrifice all of their equity to get out. New York City is a market of circumstance. But chances are the circumstances are going to get more severe as more and more people flee. Hundreds and hundreds and hundreds of new units are flooding the market there every single day. It’s a disaster!

Spotting trends is one of the most important muscles that you need to build as a business person. You have to notice things that are different and are changing and are doing that in a dramatic fashion.

There is slow moving opportunity and there is fast moving opportunity. I have just shown both. Real estate in general is slower moving but right now it’s anything but.

Prices are skyrocketing. The cost of new construction on inferior lots is 2 to 3 times higher than homes that are existing and are in prime locations. That’s due in large part to new costs and those New Yorkers that are fleeing to Florida and used to paying prices from 5,000,000 to 90,000,000.

The more they make the faster they are fleeing to places like Florida. That is driving prices up. But not just up skyrocketing up!

Homes are going up 5%, 10%, and 15% a week! They won’t be able to build fast enough. And they’re not just coming from New York. For the first time, they are fleeing California and heading for Florida as well!

What does that mean? Well it means there are two things that could happen. The homes that are definitely overpriced will either come down in value and existing homes will go up in value and they will meet in the middle or the new homes will actually fetch those prices and existing homes will go up even more!

Now there are downfalls and pitfalls with all of this. When folks start to make obscene amounts of money whether it’s in stock market, bitcoin, real estate, domains or any other thing and it’s very widespread, that can be dangerous.

Think of it this way, if everyone was very wealthy and nobody had to work who would actually do the work? That’s the danger!

But in the meantime, you reap as much as you can and hope it’s enough because that steamroller of inflation is coming our way and it’s coming our way in a very big way!

And then of course I’m gonna have someone asked me what that has to do with domains? And my answer will always be you can’t be a SUCCESSFUL domain investor without being a business person. A business person has their eyes on multiple sectors. They look for changes. Any changes.

You have to be economically fluent. You have to understand the difference between a recurring bill and an income-producing asset. You have to learn about not overextending yourself and being in a position where you are stuck or at the mercy of others or time itself.

Domaining is about people and populations and audiences. Business is about people in population and audiences. They are directly related to a degree where it may determine your success or your failure.

Domains are about population centers. Cities and towns are about population centers. Buying power and value is about population centers. Swampland has no population. Domains have to be able to attract large audiences. They need to be targeted. Domains are about math. If there is nobody in the "Domain Audeince" what do you have?

When the audience flees places like New York City and the population declines and few are replacing that population, you have a recipe for a major crash! On the other hand when you are in an expanding population area and your audience is growing so are the prices.

So here you have a vivid tale of two cities or 2 areas and the dramatic difference that is usually not visible with the naked eye. Never close your eyes to big shifts like this. Possibly the most dramatic shift I have ever seen in my lifetime! There is a word for that.......OPPORTUNITY!!

Good luck to all!

Rick Schwartz