As the world contends with the coronavirus outbreak, most aspects of life have shifted. Countless of these changes may be temporary, but on the other hand, others may last quite a while. The future seems less certain than it used to be. This is why it’s quite acceptable for Radford rental property owners to seriously consider how COVID-19 is changing the real estate market and how those changes may affect you.
According to current economic indicators, it’s safe to say that changes are on the way. Nonetheless, that does not actually mean that all of the changes will be bad ones. Market data shows that home prices are still rising albeit in a gradual manner. Growth in the first part of 2020 was less than 1%, even though that has improved since then. Slower home price growth can possibly be good news for you if you are able to buy another rental property but it may also slow the appreciation of your property values on existing properties. With that said, the fact that home prices continue to grow is a great sign that the real estate market continues to be resilient in the face of extraordinary circumstances.
This is really important given the fact that lots of property owners are so worried about another housing market crash such as the one we experienced in 2008 – and for a good reason. With such high unemployment rates at these times, it looks like it’s hard to avoid another big wave of foreclosures as people stop paying their mortgages. Then again, most experts do not see another real estate market crash coming. On the contrary, most agree that property equity is expected to decrease as buyers nationwide continue to show interest in both existing and new homes.
Another unexpected change this year has been multiple reductions in mortgage interest rates. With the purpose of preventing a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. As a Radford rental property owner, such low rates present several opportunities. These can range from refinancing existing loans to lowering your monthly payment to borrowing for your next property at very favorable rates. Without a doubt, the low rates have started something of a mad dash to secure financing, countless lenders are either overwhelmed by demand or tightening their lending criteria – or both. High demand has similarly created longer turnaround times for a lot of parts of the purchase process, from inspections to appraisals. Having said that, just as long as you are patient and have a lender on board, you should absolutely be able to take advantage of current rates.
Doing it that way is definitely important because while a housing market crash may not be expected, experts predict that another recession is almost certain. While stimulus funds from the federal government have helped delay the worst of it, such a fix is temporary at best. As conditions worsen, and with the trajectory of the coronavirus outbreak still unknown, industry experts don’t know how COVID-19 will affect the real estate market next year. A lot of real estates professionals are adapting to pandemic conditions by using digital technologies in new and creative practices. With virtual sales, online property tours, and Zoom consultations in their arsenal, real estate brokers, mortgage lenders, and property managers are applying newly developed tools to keep the market moving forward.
It would seem to be that these new tools become the new normal of the real estate market, generating further efficiency, and energy in the business of real estate investing. For Radford rental property investors, it’s imperative to stay vigilant for opportunities to streamline and modernize both your investing and your property management process. Contact us today if you actually want help on how to do so, so you successfully make it through whatever the future may bring.
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