As we work with buyers, a difficult concept to convey is just how time-sensitive inventory is at any point in time. Allow us to explain. Picture a buyer who is looking for a character-filled apartment. Let’s say they have a thing for modern yet wood-burning fireplaces. If the search is happening when inventory is tight, there may be no apartments that meet this criteria.
The buyer then thinks “surely I’m not crazy – I mean such apartments must exist. Why am I not seeing them?” Because they’re not on the market at the time when you are searching. Even if inventory is not so tight, there are only so many apartments that are on the market and that are going to fit a buyer’s parameters.
At any point in time, you are only seeing the percentage of the market that is for sale at that time. That sounds self-evident, but let it sink in. At any point in time, you may only be seeing 2% of all the possible inventory in the market. That’s a bit daunting when you think about it. In portfolio terms, you’re talking real market-timing risk.
The reason we’re bringing this up is to put you in choice about your next step: do you wait the market out for the next round of the 2% of the market, and then the next round, and the next round OR do you pull the trigger now and compromise? If you buy, it’s a leap that nothing better will come along in the near-term, and if you wait, it’s a leap of faith that it will. You only have control of what you know today: prices are stable, rates are low and you’re looking to buy.