I'm writing you from San Miguel de Allende, Guanajuato, Mexico. 🇲🇽

It's a beautiful town in central Mexico that reminds me of Florence, Italy and even St. Augustine, Florida. 

There are cobblestone streets, lively restaurants, and people visiting from all over. 

Take a look:

While it's in a totally different part of the world, the same phenomenon seems to be happening all over in desirable areas (including Northeast Florida).

People from outside the area are coming in and buying the real estate.

For example, here's a 2/1 in the historic district for $340k that would be quite affordable for a lot of people in the states.

If you needed a little more space, here's a 4/3 for $429k.

In turn, these out of town buyers are making real estate become too expensive for locals and they're having to adjust their living situation to cope or relocate.

Sound familiar? 

Are we in a housing bubble?

Because I'm traveling, I'll keep this week's letter a little shorter.

A lot of people believe we're in a housing bubble. 🫧

While I think the example above serves as a reminder that it's all relative, I wanted to describe what a real estate bubble looks like in simple terms to see how much our market resembles one:

Now, think about how many of those apply to your local market?

Bonus points if you can prove it with data compared to just providing your opinion.

Finding Opportunity

It's very difficult to see a bubble while you're in it. 🫣

Sometimes, it's because the data just isn't available or clear yet.

Other times, we get blinded by our opinions and emotions.

I probably should have added a #6 to the list: you're more likely in a bubble as soon as the doom and gloomers give up and believe the hype that we're going higher.

In this category, I feel like we are more likely at a bottom than a top. 🤷‍♂️

In other words, there's far more people calling for real estate (among other things) to collapse under it's own weight than for prices to continually increase forever.

Maybe we'll look back at this in the future and laugh at how blind we all were. Who knows.

One thing I do know, and have been reminded of on this trip, is that people want to live in desirable areas and are excited about the same prices you can't believe someone would pay. 🤩

Just ask the locals.

With a wave of retirees hitting the streets and remote work continuing to go strong, I think we might just be at the start of a changing landscape in many places instead of an end. 

Real estate doesn't move quickly and that can make it harder to see the big picture.

Spend this week considering if we're at the start of something bigger rather than the end.

I bet you'll see opportunities everyone else is missing. 🚀

Dr. Alex Stewart
Founder

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