Market Trends and What the Future MAY Hold in Real Estate with Dave Meyer

I am excited to welcome Dave Meyer to the show today! Dave has been investing in real estate for 12 years, primarily in Colorado. He is also the Vice President of Data and Analytics at BiggerPockets and the host of BiggerPockets' newest podcast, On The Market, where he and his co-hosts break down recent data and trends, to help investors craft their strategies and invest with confidence. They believe that the modern real estate investor doesn’t have time to research every headline and trend. That is why Dave Meyer and his expert panel do it for you!

We begin the episode with Dave sharing his background story and how he ended up in real estate. He shares that he graduated during the great recession, and it was pretty tough to get a job. Dave started investing right after college in rental properties after a friend who was making good money doing the same introduced him to the space. Initially, he had no money, but he found some partners, and he was able to borrow some of the down payment from family members. After several years, his career outside the real estate started to evolve, so he went back to grad school and got his master's degree in data science and data analytics. He combined the two careers and got a job at BiggerPockets. Dave has had a lot of jobs there but what he does now is internal data analytics. During COVID, he started analyzing the housing market and real estate market trends because people were freaking out. Dave also started writing articles on market trends, and it has evolved into a new brand, On The Market, which is a podcast and YouTube channel.

We then talk about Dave’s first rental property investment in real estate. He shares that it was a four-flat multifamily property in Denver. He was just starting, and he didn’t know what a good deal he had found. Dave sold the property in 2018 at a triple the initial price. The property had a lot of deferred payments, and it needed serious work. He had just completed grad school and was working full-time in BiggerPockets, and he couldn’t get into it. He sold it in a 1031 exchange and got additional properties, so he didn’t take any equity out of the market. As an expert in the housing market, Dave doesn’t buy or sell properties at an exact moment. According to him, sticking with a strategy over the long term will help you do well in real estate.

Next, we discuss why inventories are low even when the prices are at an all-time high. Dave shares that since the great recession, investors have built very few houses in the US, and he believes that there is a housing supply shortage in the population. According to him, overall inventory is a function of how many houses get listed in the market and how many buyers there are. The number of houses listed in the market is pretty good, and it’s a common misconception that no one is selling their house, but people are. There is so much demand that they get snapped up so quickly that it feels that no houses are on the market because they don’t last more than a week. The market is also so competitive, and people don’t want to buy back in, and inventories will be low because of the interest rates. Selling a property now as a homeowner will give you a lot of equity, but you will be buying in a rising interest rate market where prices are still super high.

We then talk about predicting what will happen in the housing market. According to Dave, data science and data analytics is all about probability. You have to learn to think in probability when creating your market models. This makes it very important to divorce decisions from the outcome as an investor by taking the information that you have and making a good decision. A decline is a normal business cycle and not a bubble, but this is what gets the most attention when people are uncertain about what will happen. However, if you want to be a good investor, you just need to be honest about your uncertainty and invest more conservatively. It is always the right time to make a deal if the numbers work.

Lastly, we talk about the rental market and what to expect in the near future in the United States. Dave shares that he still believes in the long-term prospect of rental property investments. There will always be a subset of people in the population that can’t or don’t want to be a homeowner, and someone needs to supply housing to them. For Dave, he takes his role seriously, and he’s always trying to be a good landlord and provide a good product to people. Thinking of your rental as a product and finding a way to get a good property, low vacancy rate, and have people take care of your homes will make your business successful.

Make sure you don’t miss another amazing episode of the Just Start Real Estate Podcast with Dave Meyer and get valuable information on market trends and the future of the real estate market!

Notable Quotes:

“Understanding the housing market and macroeconomics will positively impact your strategy.”