Cycles are a fact of real estate. Bubbles boom and burst over time. The problem is that none of us can foresee the future, and thus none of us know the exact shifts that will occur in the market. However, canny real estate agents always keep their ears to the ground to ensure that there are no surprises. There are a few resources that can help you prepare for the next real estate bubble.
The UBS Real Estate Bubble Index
One of the most valuable reads for a real estate agent is the UBS real estate bubble index report. Issued annually, this report examines global markets to help determine where bubbles will be bursting next; it also looks at cities with undervalued properties. While nothing is certain, UBS has a long track record of analyzing this data and producing excellent results. In addition to showcasing big markets, the report also gets into granular details, to help you understand upcoming trends.
Overvalued and Undervalued U.S. Real Estate
One thing that the bubble index does is to break down large urban markets all over the world for significant trends. As an example, the 2018 report showed that Hong Kong was the most overvalued city. In the U.S., the cities of Los Angeles, New York, and San Francisco are the leaders of this category. On the flip side, the report also analyzes undervalued areas. Domestically, Boston stands as fairly valued, while Chicago remains one of the biggest undervalued urban markets. Knowing these trends can help you make smart decisions for the future.
Real Estate Stats to Watch
The Real Estate Bubble Index also gets incredibly granular, pulling critical pieces of data to analyze. One example is real estate price to income ratios, which provide insight into market trends. In addition, the report often points out the first signs of market decline in major markets.
Real estate bubbles are inevitable. Keeping an ear to the ground and using specific tools can help you keep ahead of the game.
