The outbreak of the coronavirus has caused a lot of changes in our life. Changes abound –temporary or otherwise. And the future appears to be less certain than it used to be. Because of this, some Bauxite rental property owners are wondering how COVID-19 is affecting the real estate market.
Based on current economic indicators, it’s safe to say that changes are on the way. We don’t necessarily have to be afraid of change. Market data shows that home prices are still rising, albeit very slowly. Growth in the first part of 2020 was less than 1% but it’s been showing an upward trend 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. The real estate market continues to thrive in these extraordinary circumstances as evidenced by the continually growing home prices.
Property owners certainly don’t want another housing market crash like the one in 2008. They are afraid that the high unemployment rates might bring about a lot of foreclosures as people stop paying their mortgages. But a real estate market crash does not seem like a big possibility. On the contrary, they agree that property equity is likely to decrease as buyers nationwide continue to show interest in both existing and new homes.
Multiple reductions in mortgage interest rates have also been an unexpected change this year. To prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. These low rates give Bauxite rental property owners many opportunities. You can refinance existing loans to lower your monthly payment or borrow for your next property at very favorable rates. These low rates have caused a lot of people to secure financing. Lenders are swamped by the demand and are tightening their lending criteria. High demand has also caused longer turnaround times in the purchase process from inspections to appraisals. As long as you are patient and have a lender on board, you could still take advantage of current rates.
Doing this is important because even when a housing market crash is not on the horizon, another recession is almost certain. The stimulus funds from the federal government are just a temporary solution. Until the trajectory of the coronavirus ceases to be unknown, or if conditions worsen, not one of us can say how COVID-19 will affect the real estate market next year. Many real estate professionals are adapting to pandemic conditions by using digital technologies in an innovative way. 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.
The new normal has given rise to the need for these new tools in the real estate market. These will increase efficiency and energy in the real estate investing industry. For Bauxite rental property investors, it is important to be on the lookout for opportunities to streamline and modernize both your investing and your property management process. Contact us today for help on how to do so, so you can successfully make it through whatever the future may bring.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
