With the gradual ease of the coronavirus lockdown, some homebuyers and real estate players are capitalizing on the low prices to make purchases while distress sales may be in the increase and help buyers land a jaw-dropping deal. This piece discusses; reasons why this period may be a very good time to invest in real-estate, how real-estate group investment can help you while investing, and how US-Reviews helps you in your finances.
The COVID-19 pandemic has had a negative impact on the economy of most countries, leaving the real estate market in disarray. The pandemic has not only caused a huge wave of financial crisis for many home-buyers as massive unemployment, wage cuts, business failures, and job uncertainty have affected the purchasing power of most buyers but has also caused great difficulties in getting building materials for homes.
Another effect the Coronavirus pandemic has had on the property-sector is an increase in the number of people searching for homes away from town and city centers. Although this may not be a permanent change, however coronavirus is making a lot of people think about how and where they work and live. A lot of people have suddenly realized that they can work from home and avoid the commute and the office, and this is already influencing the market.
Although, it is reasonable to assume that it will take some time to see just how severely this virus will affect the real estate industry, however, study reports a glimmer of hope as there are some signs things are starting to stabilize. The hope, therefore, is that as lockdown restrictions continue to be lifted, economies and housing markets will rebound.
The Evolution Of Real-estate In The US: Are Prices Higher?
After three years of growth, homeownership continues to rise in the first half of 2019, despite the continued rise in property prices. The homeownership rate in the U.S. stood at 67.9% in Q2 2020, up from 65.3% in the previous quarter and 64.1% a year earlier, according to the U.S. Census Bureau. In fact, it was the highest level since Q2 2008. House prices increased by 2.17% during the latest quarter (2.29% inflation-adjusted), according to S&P/Case-Shiller.
House prices continue to rise in all of the country's 20 major cities, according to Standard and Poor's, with Phoenix posting the highest increase of 8.96% during the year to Q2 2020, followed by Seattle (6.5%), Tampa (5.89%), Charlotte (5.74%), Cleveland (5.4%), Minneapolis (5.39%), and San Diego (4.98%). More moderate house price rises were seen in Portland (4.25%), Atlanta (4.2%), Miami (4.03%), Denver (4.02%), Los Angeles (3.91%), Washington (3.54%), Boston (3.51%), Las Vegas (3.33%), Detroit (3.07%), and Dallas (3.06%). New York saw minimal house price growth of 1.67%, as well as San Francisco (1.45%), and Chicago (0.6%).
As a result of the financial crisis that the pandemic has caused, many workers have either had their wages cut or lost their jobs. The unemployment rate in the United States hit around 15 percent in April 2020. For these reasons, a lot of people are cautious about buying a home. However, online reviews on real-estate companies such as; Home Go, indicate that there is an increase in homeownership rate. The dream of purchasing a residential property is now more realistic due to a drop in mortgage interest rates – a poll in March 2020 found that this was the factor that most impacted the decision of homebuyers. Competition in the housing market is driving up prices, but there appears to be a willingness to pay more because the median household income continues to increase. Tenants living in rented accommodation have expressed concerns that a loss of income could result in them being unable to pay rent. The federal government has, therefore, stepped in to temporarily halt residential evictions. The order prevents the residential property owner from removing any covered person from where they live through the end of 2020.
Is this a good time to invest in real estate?
This is a question most investors have had to ponder over recurrently as a result of the growing threat of recession and financial hardship which the pandemic has ushered in. However, real estate agencies reviews suggest this is a good time to invest in real estate provided you have the right tools, resources, and information at your disposal. If you are not financially buoyant to invest, US-Reviews provides you with access to an ample amount of mortgage services reviews to help you gain an insight into an overview of reputable companies that give out loans.
A valuable but scarce piece of information is that it's a good time to invest in real estate when a recession hits or is about to hit. The main reason for this is that recessions create very motivated home sellers.
While the number of mortgage defaults is hard to predict because many homeowners are seeking forbearance on their loans, experts anticipate that delinquencies could surpass what we saw during the Great Recession. The problem for homeowners is appreciable: more than 36 million people have filed for unemployment benefits in just the last two months. Forbearance relief will eventually end and the missed payments will come due. The result will be an increase in the rate of distressed homeowners.
You can take advantage of the situation by helping homeowners out of an "ugly" situation and secure a very good deal from real estate investment companies.
Is Real-Estate A Safe Investment?
Since 2013, real estate has ranked as the top investment pick for the majority (35%) of Americans, according to Gallup's annual Economy and Personal Finance survey, conducted in early April 2020. That puts real estate ahead of stocks and mutual funds (21%), savings accounts (17%), gold (16%), and bonds (8%) as the most favored investment.
However, this doesn't suggest real-estate is the safest means of investment as it comes with its own risks just like any other investment. Real estate investing can be lucrative, but it's important to understand the risks.
Key risks include bad locations, negative cash flow, high vacancies, and problem tenants. While Other risks to consider are the lack of liquidity, hidden structural problems, and the unpredictable nature of the real estate market.
If you are looking to improve your personal finances, you can learn more about Maxifi Planner to gain an insight into how the financial management software helps minimize and sophisticate the tasks that come with finance management such as; budgeting, investment, expenses, insurance, and more.
Conclusively, real estate has traditionally been considered a sound investment, and savvy investors can enjoy a passive income, excellent returns, tax advantages, diversification, and the opportunity to build wealth. Just as with other types of investments, however, real estate investing can be risky.
You can limit your risks by doing your due diligence and conducting a thorough real estate market and rental property analysis. Also, be sure to hire pros to inspect the property, screen potential tenants, and learn everything you can about the real estate market.