In the complex, fast-paced, and ever-changing world of real estate, the market is constantly evolving. As a real estate investor, it is important to adapt your strategy as the market changes. There are no hard and fast rules about investing in real estate. Instead, the key is to follow trends closely.
Over the last two years, real estate prices have continued to increase. Last year prices were expected to decrease, but the opposite proved true. The trend is continuing this year. Increased prices, however, aren’t stifling the high demand for property.
Faster Property Sales
Real estate is continuing to be sold at a faster rate. Properties are selling 8% faster than they were the previous year. Recent mortgage rates, however, have increased from 4% to 5% over the last year. Because of this, home buyer demand is expected to drop, but the market has yet to be affected.
Although trends tend to be consistent throughout the country, you should take advantage of investing in the particular areas in which those trends peak. Recently, the highest sales have occurred on the west coast. To determine the best option for you, include a wide variety of locations in a comparative market analysis.
Seasonal trends are also important to take into consideration. People most actively participate in real estate investing during the summer. Summer is also the most popular time for the real estate market. Keep in mind that you’ll be competing with many people during this season. Financial preparation will be key.
Demographic shifts also influence the real estate market. Baby Boomers are moving out of the suburbs and into urban areas, and some have opted to rent instead of buy. Investors now need to consider both the older and younger generations.
However, the demand for rentals, especially single family rentals, is actually decreasing in most of the country. While rental prices have steadily increased over the last several years, this growth is expected to stall out. Occupancy rates have decreased. If you’re involved in the rental sector of the housing market, it will be especially important to invest in new methods of attracting tenants.
The real estate market is unpredictable. Trends are the only hints available to investors, so it is important to be able to understand the market’s current conditions and how they will impact your investment.