Thanks in large part to a global pandemic that has required swift and perhaps long-lasting adjustments in everyday life, the real estate investment arena looks much different now than anyone could have expected when the year began. Whether you are buying, selling or staying in your current home, here are a few trends that real estate investors should consider for at least the rest of 2020.
A Slow Rise in Home Prices
U.S. home prices rose 5 percent last year from 2018. In April 2020, however, home prices were up only .6% compared to 2019. This slower growth trend is likely due to the coronavirus and market uncertainty. But by the third week of May 2020, home prices had experienced a 3% growth rate, which is closer to the rate that existed pre-pandemic. For sellers, this means a potentially higher profit, of course, but it’s important to be mindful that fewer offers may exist due to stiffer competition. Meanwhile, buyers and investors absolutely must find out how much they can really afford to spend on a house. Don’t rush into any purchase that isn’t financially shrewd and beneficial. If you were mulling the idea of getting out of a market, now is probably the time to cash in a property. For a more cautious investment, consider apartments rather than single-family homes.
A Live-Work-Play Lifestyle & a Greater Sense of Community
Residents of urban areas typically want easy access to housing, around-the-clock amenities and commutes that can be done by foot rather than by vehicle. According to at least one report, investors should expect more communities to embrace the live-work-play lifestyle. Prior to the onset of the COVID-19 pandemic, co-living and co-working spaces were being built at a rapid pace, and the rise of community living was particularly seen in investment vehicles such as crowdfunding where many investors come together to purchase small shares of ownership in the same property. This trend may return in the next year, because even amid all the uncertainty that comes with a pandemic, people still crave a strong sense of community.
While the real estate industry was in bygone years a bit reluctant to fully embrace new innovations in technology, high-tech systems are now the rage. Building systems management, artificial intelligence and other advancements will further accelerate the use of technology in most all areas of the industry while also creating new opportunities for investment and growth.
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