The coronavirus outbreak has turned our lives upside down. These changes may be temporary, or they may be here to stay for a while. This means that the world is less certain of what the future holds. With all of this happening, Davie rental property owners are beginning to think about how COVID-19 might affect the real estate market.
Based on current economic indicators, it’s safe to say that changes are on the way. But remember, not all changes are bad. Market data shows that home prices are still rising, if very slowly. Although growth in the first part of 2020 was less than 1% it has improved since then. Slower home price growth may be good news if you are ready to buy another rental property but may slow the appreciation of your property values on existing properties. As home prices continue to grow, this means that the real estate market continues to be resilient in today’s extraordinary circumstances.
Property owners would do well to take note of this, as there is the fear of a repeat of the 2008 housing market crash. With today’s high unemployment rates, it seems like foreclosures are unavoidable as people stop paying their mortgages. However, most experts don’t expect a real estate market crash. Instead, they tend to agree that property equity is likely to decrease as buyers all over the country show interest in existing and new homes.
Another unexpected change this year has been multiple reductions in mortgage interest rates. To prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. For Davie rental property owners, these low rates mean more opportunities. These can range from refinancing existing loans to lowering your monthly payment to borrowing for your next property at very favorable rates. Since these low rates have more people wanting to secure financing, lenders are overwhelmed by the demand or are tightening their lending criteria. Expect longer turnaround times from inspection to appraisals as high demand continues. Be patient, get a lender on board, and enjoy the current rates.
Doing this is important because although experts don’t see a housing market crash happening, another recession is almost certain. Stimulus funds from the federal government may have delayed the worst, but it is still just a temporary fix. As conditions worsen, and since the coronavirus outbreak still leaves a lot unknown, industry experts still don’t know COVID-19’s effect on the real estate market next year. Many real estate professionals are adapting to pandemic conditions by using digital technologies in new ways. With virtual sales, online property tours, and Zoom consultations in their arsenal, real estate brokers, mortgage lenders, and property managers are using new tools to keep the market moving forward.
These new tools may now be the new normal for the real estate market, resulting in efficiency and energy in real estate investing. For Davie rental property investors, there are sure to be many opportunities to streamline and modernize your investing and your property management process. Contact us today for help on how to do so, that way you can successfully make it through whatever the future may bring.
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