Great article from https://money.usnews.com/ that has some good information on housing and what might be happening in this current market. Real Estate is always changing somewhat, that is why understanding some of the trends helps you to create an assumption on the future markets.
For example there is a lot of property being purchased with cash, without a mortgage. There is a lot more cash buyers than you think. The last week in December I had 6 homes close all cash! What's that do for future markets? Those properties will not be foreclosed on by any banks, there are no loans on them. How will that effect the future markets?
Banks were not allowed to lend much and therefore homes where purchased a lot with IRA's and cash. Today you can get a mortgage, but there was a 6-8 year layoff from any normal lending. That really changes the future and a foreclosure crisis.
"Build-to-rent gains momentum.
Build-to-rent is a relatively new trend, says George Maravilla, vice president at Tower Capital in Phoenix, but poised to expand. “These newly built and to-be-built rental communities have a lot of the conveniences and amenities of an apartment but feel more like a home,” Maravilla says, and as more developers move into this space it’s likely to join the mainstream of CRE asset classes. Build-to-rent communities are designed to fit the privacy and affordability needs of younger buyers shopping for a mortgage loan and boomers looking to downsize. Maravilla says build-to-rent represents a new frontier for investors with a pioneer mindset looking to diversify into non-traditional housing."
Build-to-rent is a relatively new trend, says George Maravilla, vice president at Tower Capital in Phoenix, but poised to expand. “These newly built and to-be-built rental communities have a lot of the conveniences and amenities of an apartment but feel more like a home,” Maravilla says, and as more developers move into this space it’s likely to join the mainstream of CRE asset classes. Build-to-rent communities are designed to fit the privacy and affordability needs of younger buyers shopping for a mortgage loan and boomers looking to downsize. Maravilla says build-to-rent represents a new frontier for investors with a pioneer mindset looking to diversify into non-traditional housing."
Subdivisions are being built to lease and Air BnB not to sale. That will effect the inventory of homes that can be purchased. That will help existing homes value, and that would probably mean the equity would increase for existing homes in the near future.
Real estate really changed in 2006 and more investors than ever got into the market. Me and my team sold over 400+ homes during that time. They almost all where for cash!
"Construction prices inched up 0.5 percent in October, reflecting a 7.9 percent increase year-over-year, according to the Bureau of Labor Statistics Producer Price Index. That’s something investors should be watching closely in the year ahead, says Lee Roberts, managing partner of SharpVue Capital in Raleigh, North Carolina. “In addition to supply-demand factors, there is a large policy component to this,” Roberts says. “Not only are interest rates being driven higher by the Fed, but materials costs are being affected in part by trade policy, while labor costs are moving higher in part due to immigration policy.”"
New construction always is pricey and they really effect the local market when home buyers start reselling them. That gives all the surrounding homes more comps, and that usually means higher prices. New home building can be a great asset if you have a large inventory of older homes. It really helps the local real estate market and brings higher prices.
For example Pepper Pike Ohio has some really nice new builds going up and they also have a good inventory of homes that are already built. That is a city to watch on pricing. The city is also land locked and only has so much raw land to build on.
Investors have a lot of issues that they need to be aware of when buying a property. I personally assist my clients in finding the best homes for their budgets. I'm Brett please call 216-703-5740 EXP Realty and 602-363-6551 Az EXP Realty realty lets get coffee or chat on a conference call.
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Thank you