With the coronavirus outbreak, many aspects of life have changed. Though some changes are temporary, others might last a while. The future is much less certain. With all this, Southwest Waterfront rental property owners are starting to wonder how COVID-19 will change the real estate market and how those changes will affect them.
Based on current economic indicators, one can say that changes are on the way. But there’s no need to fret as not all changes are bad. Market data shows that home prices are still rising, if very slowly. Even if growth in the first part of 2020 was less than 1% but 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. The fact that home prices continue to grow is a good indicator that the real estate market has resiliency in these extraordinary circumstances.
It is important to take note of this because many property owners fear another housing market crash -like the one in 2008- will happen. Today’s high unemployment rates might lead to foreclosures as people stop paying their mortgages. But most experts do not see another real estate market crash on the horizon. In fact, most agree that property equity is likely to decrease as buyers nationwide continue to show interest in both existing and new homes.
Another unexpected change brought about by the current situation is the multiple reductions in mortgage interest rates. To prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. This presents a lot of opportunities for Southwest Waterfront rental property owners to avail of these low rates. These can range from refinancing existing loans to lowering your monthly payment to borrowing for your next property at very favorable rates. With these low rates, there has been a mad dash to secure financing. A lot of lenders are overwhelmed by demand and some are even tightening their lending criteria. Longer turnaround times from inspection to appraisals are to be expected because of the high demand. It pays to be patient. As long as you have a lender on board, you are likely to enjoy the current rates.
You should act now because even if experts don’t see a housing market crash happening soon, another recession is almost certain. Stimulus funds from the federal government may have helped soften the blow, but it is still a temporary solution. With the coronavirus outbreak trajectory still unknown, industry experts can’t really tell how COVID-19 will impact the real estate market next year especially if conditions worsen. Most real estate professionals are turning to digital technologies to adapt to pandemic conditions. 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 are the new normal in the real estate market. Use these to increase efficiency and energy in real estate investing. For Southwest Waterfront rental property investors, it is vital to stay abreast of leads or 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 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.