Is it possible to find a great property deal in an overvalued real estate market?
Let's start by stating the obvious: it’s much easier to make money in an undervalued real estate market than in an overvalued one. Please also note that one of our future blog entry will be names how do you know if a real estate market is overvalued, fairly priced or undervalued? At Anh Thomas Investment, we believe that indeed it is possible to find a good (maybe not great) deal in an overvalued real estate market. In an overvalued real estate market, the average prices are too high compared to what they should be. However no one will argue that regardless of the state of a real estate market can be, some deals are better than others. In other words, two persons living in the same city can end up buying a similar house at totally different prices. The reason could be that one person is willing to do some refurbishment while others don't or that a seller sometimes can be in a rush to sell and would be willing to accept lower value than the market offers. There are a multitude of reasons that can explain why some people make a good deal in real estate while others do not. But put it very simply, if the real estate market you are investing in is overvalued by 10% and that you manage to find a property prices 20% below market price you would have made a good deal. Of course if you had found a property prices 20% below market price in a undervalued real estate market you would not have made a good deal but a great one!