BiggerPockets Real Estate Podcast

Episode: The 2026 State of Real Estate Investing: An “Easier” Road Ahead
Host: Dave Meyer
Date: January 5, 2026

Episode Overview

In this special State of Real Estate episode, Dave Meyer breaks down the outlook for real estate investing in 2026. After several challenging years, he explains why the market is set to become more favorable for investors. Dave discusses emerging opportunities due to improving inventory, easing rates, and shifting market dynamics—and shares a framework for investing success amid the so-called "Great Stall." The episode blends strategic advice, data-backed optimism, and practical tactics for navigating both the risks and rewards of the current housing market.

Key Discussion Points & Insights

1. The 2026 Market Theme: “Improving”

Timestamp: [02:25]

• Dave’s word for the 2026 state of real estate investing is "improving."
• After years of limited deal flow and low affordability, conditions are turning a corner.
• More inventory, slightly better affordability, less competition, and better negotiating leverage are now present.
• Dave stresses that, while not perfect, these changes offer "reason for optimism" for investors.

Quote:

"If I had to pick just one word for it—I always try and just narrow it down to one word. And my word for 2026 is improving." (Dave Meyer, [02:25])

2. Market Conditions Driving Opportunity

Timestamp: [04:10–08:00]

• Inventory: More homes on the market. Not a "flood," but enough for more choices.
• Affordability: Slightly improving after being at 40-year lows.
• Market days on market have gone up, boosting leverage for investors.
• Cash Flow Prospects: Rents are forecasted for modest growth while prices stagnate, creating better cash flow scenarios.
• Reduced Competition: More inventory leads to relatively less competition, even as demand stays steady.

Quote:

"Affordability is going up. This one just—it honestly, it warms my heart. ...the last couple years have been near 40-year lows. ...Just this last data that we have from October of 2025, it is the best affordability we've seen in three years." (Dave Meyer, [05:58])

3. Downsides & Trade-Offs

Timestamp: [08:00–09:10]

• Appreciation likely to be flat or slightly down.
• Still a “long way to go” on affordability: "Housing is not affordable yet." (Dave, [06:51])
• Rent growth will be modest, not spectacular.

4. Why Waiting for a Crash is a Mistake

Timestamp: [12:00–15:45]

• Dave dismisses crash fears, calling them "not supported by any data."
• References historical patterns: true market crashes are rare (2008 is the exception, not the rule).
• Current fundamentals—credit quality, low delinquencies, steady demand—do not indicate a crash.
• Advises making data-driven decisions, not fear-based ones.

Quote:

"...the idea that the bottom is going to fall out of the market is not supported by any data. It's not supported by any information. It is fear that is driving those ideas. And as investors, we can't make our decisions based on fear." (Dave Meyer, [15:34])

5. The “Great Stall”: Likely Market Scenario

Timestamp: [12:30–16:20]

• Dave coins the market’s next phase as 'The Great Stall'—a drawn-out correction, not a crash.
• Prices expected to remain flat; wages outpacing home price growth will slowly restore affordability.
• Lower mortgage rates compared to last year (down from 7.25% to 6.25%).
• Correction is normal: periods of flat prices restore equilibrium.
• "This is the normal way where affordability is restored to the market." (Dave Meyer, [13:52])

6. Investor Framework for 2026 Success

Timestamp: [18:40–29:00] Dave's 4-Pillar Playbook:

1. Plan for the Great Stall:
   • Assume slow/no appreciation and slow rent growth.
2. Modest Short-Term, High Long-Term Expectations:
   • Adjust expectations for immediate returns; focus on conservative, sustainable growth.
   • "Real estate investing has worked for decades, for centuries, with exactly these kinds of conditions." (Dave Meyer, [21:50])
3. Underwrite Conservatively:
   • Run numbers assuming no appreciation and no rent growth; be “very, very picky.”
   • "I'm underwriting with no appreciation next year, I'm going to underwrite for probably no rent growth, no market rent growth." (Dave, [24:35])
4. Focus on Upsides ("Upside Era"):
   • Seek properties with additional profit levers: under-market value, path-of-progress, zoning/stringent value-add.
   • "Buy 5% below market comps... It's possible right now. This is the benefit of the Great Stall." (Dave Meyer, [26:50])

7. Best Tactics & Strategies for 2026

Timestamp: [30:30–41:00]

A. Value-Add Investing (e.g. BRRRR, renovations)

• Optimize underutilized or outdated properties.
• Wide equity spread possible between unimproved and improved conditions (great for both flips and buy/hold).
• "Value add works in almost any market conditions." (Dave, [31:30])

B. Cash Flow Accelerants

• Mid-term rentals, co-living/rent-by-room options can drive higher cash flow.
• Best suited for high-demand markets and investors willing to be active managers.
• "If you want to boost your cash flow, this could definitely work in 2026." (Dave, [33:40])

C. Zoning Upside / ADUs

• Look for properties where additional units or density are permitted.
• Many cities are changing codes; this can mean serious value appreciation over time.
• "These are great upsides... That's a great way to take a good deal today and turn it into a home run in the long run." (Dave, [34:30])

D. “Slow BRRRR” Approach

• Buy normal rentals with long-term financing; renovate gradually as tenants leave, reducing risk.
• "It takes so much risk off the table. I can buy these properties using conventional financing ... saves me so much money." (Dave, [36:48])

E. Short-Term Rentals

• More risky due to oversupply and regulatory risk.
• Must underwrite very conservatively and expect reduced occupancy rates/Average Daily Rates.

F. Commercial Real Estate & Flipping

• More opportunity emerging, but also more volatility/risk; only pursue when buying well below current values.

G. General Tactics & Mindset

• Focus on long-term holds over quick wins.
• Seek under-market deals and prioritize fixed-rate debt to lock in stability.
• Be patient and disciplined—don’t stretch for mediocre deals or chase returns from previous "Goldilocks" years.

Notable Quotes & Memorable Moments

• On the mindset shift:

  "Financial freedom isn’t going to find you. You have to go out and get it. And in my opinion, now is as good a time as any." (Dave, [09:59])

• On the importance of mindset and patience:

  "There is no such thing as a perfect market. Every market has trade offs. It is your job to figure out what the market is offering you..." (Dave, [45:30])

• On why the mainstream is missing this opportunity:

  "Mainstream people might not see these opportunities, but there will be opportunities." (Dave, [45:05])

Timestamps for Important Segments

• 02:25: One-word market outlook: "improving"
• 04:10–08:00: How deal flow, cash flow, and leverage are getting easier for investors
• 12:30–16:20: The Great Stall and why it isn’t a crash
• 18:40–29:00: The Four Pillar Framework for 2026 investing
• 30:30–41:00: Best tactics: value-add, BRRRR, mid-term/co-living, ADUs, short-term/conservative underwriting

Final Thoughts & Advice

• The market is easing for investors but rewards only those who are prepared, patient, and disciplined.
• Flat prices and modest rent growth aren’t roadblocks—they’re opportunities for those who plan and underwrite conservatively.
• Focus should be on resilient assets with long-term upside, bought at a discount and financed with fixed debt.
• Don’t let fear, recency bias, or expectation of a sudden windfall hold you back—create your plan and execute.

Sign-off Quote:

"Thank you guys so much for being here for our first show of 2026. ...The market won't be sexy. Mainstream people might not see these opportunities, but there will be opportunities." (Dave Meyer, [45:05])

For more in-depth strategies and tactics, tune in to upcoming episodes and follow the weekly community discussions on BiggerPockets.