Looking to buy a home? Looking back to 2019, the real estate sector witnessed a skyrocketing growth.
With higher demand and lower mortgage rates, this was one of the most lucrative investments.
There were adverse developments too. The economic downturn caused a hike in real estate prices and the presence of new buyer demographics.
2020 is here, and experts project that the trend is likely to continue. The presence of global pandemics has caused a visible economic downturn. Whether you are looking to buy or sell, you must exercise caution, especially when investing in such uncertain economic conditions.
Curious about the trends that will be shaping this year’s real estate world? Before making your investment, consider the following;
Slow Rise in Home Prices
2019 witnessed a slower rise in prices than the previous year 2018. Experts predict that this trend will continue in 2020.
For sellers, this could mean higher profits. But this could also mean stiff competition from other sellers, hence a lot of offers for the buyers. To counter this, ensure you make your property stand out. Work with agents for listings with good offers. Los Angeles is said to be one of the cities that people should keep an eye on. If you’re looking to sell a property, an LA Sellers Guide will streamline the process for you. Such as a guide will let you know the LA investment opportunities available, price rate and how to obtain financing.
The demand for housing is on the peak. Investing in this booming market could mean different things for different investors. If you were looking to make a sale, you could either cash out now or wait for even better economic times. If you are looking to buy, make sensible predictions of future economic conditions and roll your dice.
For the buyers, however, this is bad news. Investing in this expensive market is tricky, and could land you in financial troubles if you don’t exercise diligence. Commit to sticking to your budget to avoid financial mishaps.
Lower Interest Rates on Mortgage
Since 2019, there’s been a downward trend in interest rates on mortgages. For standard loans, the rate has been dropping from 4%. This year, given the crippling economic state, experts predict that the interest will stay lower than 3%.
Higher interest rates on mortgage scare buyers away, hence stagnating or decline in market prices. Lower interest rates, on the other hand, motivate buyers. If you are looking to sell, this could be a good reason to do so. If you can’t make accurate market projections, be sure to work with an agent.
For a buyer, a decrease in mortgage rates means affordability. Take advantage of this period to make a wise investment.
Wider Gap Between Owning and Renting
Owning a rental unit has been a lucrative investment in many markets, owing to the ever-increasing rental prices. Family homes, for instance, have been unaffordable to many people with average income hence the need for alternatives.
To counter this, the idea of buying a single-family home and splitting it into smaller rental units will suffice. Buying an apartment to take advantage of the projected increase in rental prices is also a wise investment.
To keep with the competitive real estate market, homeowners need to up their game. Amenities such as state-of-the-art gyms, community gardens, and movie theatres are brought in place to attract new tenants.
2020 seems more promising, with owners more likely to go the extra mile to make tenants comfortable.
Technological advancement is yet to reshape the real estate sector.
Artificial Intelligence tools such as robots, chatbots, and virtual assistants will be used widely to help resolve client issues and provide them with information to make wise investment decisions. These tools also help agents gather their clients’ data for better service delivery.
Big Data Analytics technique has simplified prediction of future trends in real estate by processing and analyzing such data as customer behavior and online habits. Accuracy in the prediction of future trends minimizes the chances of investment mistakes.
The development of blockchain is greatly helping minimize fraud, while maintaining safe and transparent transactions. Blockchain saves money and time for both buyers and sellers as it eliminates the need for intermediaries.
Automation of activities by real estate management software has helped in reducing mobility and quicker access to information. Such also helps;
- Tracking payments
- Managing tenant data
Web platforms such as Facebook, Airbnb, and Amazon have helped real estate agents to connect with tenants more quickly. Buyers are also able to access better deals.
As the real estate market continues to get more lucrative, the pressure to make wise investment decisions continues to pile on buyers and sellers. Keenly studying these trends will be a game-changer for players in the real estate market.