Showing posts with label real estate investment. Show all posts
Showing posts with label real estate investment. Show all posts

February 24, 2020

Real Estate Industry Trends to Watch in 2020

2019 was such a happening year for the real estate industry of the United States! Housing prices underwent such a great hike touching the level $266,000 at one point of the year. Although real estate has always been the most lucrative investment avenue, yet in the past year, we witnessed a hike that was unprecedented in demand of capital from the private sector for investments in real estate and affiliated infrastructure building. Lesser mortgage rates and enhanced demand for affordable real estate fueled this enormous growth.

Real estate pundits are of the view that this trend of incremented demand is most likely to be continued moving into 2020. Definitely, housing real estate is the avenue investors should be focusing on because it is that section of the real estate industry that reaps enormous benefits even in murkier times. Accelerated growth would give rise to societal changes and more prominent economic activity; that would ultimately transform the overall real estate setting. Additionally, technology is likely to play a more significant role in reshaping the property market. The purpose of technology would not be confined to just the tangible aspects of the real estate industry. But, it would trickle down, altering the overall financial environment by slowly occupying the place left by financial institutions.

For the sake of perspective, PricewaterhouseCoopers predicts that the real estate inventory’s worth is likely to endure a rapid growth of more than 50%, causing institutionalized real estate reaching $ 45 trillion this year, from the earlier level of $ 29 trillion.

Can this year bring the results proportionate to the growth in investments? Would the real estate market be able to disrupt the existing environment? We have pondered deeply on these questions, and have come up with a rundown of emerging trends of the real estate industry:

SMALLER PROPERTY MARKETS WOULD BEAR LESSENED RISKS

The financial crisis of 2007–08 led to the recognition of the local economy’s vulnerability in smaller property markets. There was a crashing of real estate prices and massive unemployment all over. There exist individual pockets where property prices have bounced back, yet there is no substantial overall growth till now. The crisis of 2008 caused five percentage-point increments in the number of renters from being at 38.5% to 43.3%. Even at the height of the crisis, the rental property did not suffer much.

Even for rent earning, you have to be very vigilant before investing in the smaller property market. Smaller markets are still suffering from high levels of unemployment as these localities have few economic activities. It would be best if you judge the fortunes of the area before investing, even though the financial risk is not as significant as it is in the bigger property market.

In high-end property markets, investors need to keep away with credit risks, particularly when the investment is made at the lower price end. Investors cannot just rely on incrementing property values at high-end property markets to derive anticipated returns. The rental value of your investment would remain in your favor, and the investment shall not cost you exorbitant.

RESIDENTIAL PROPERTY PRICE GROWTH WILL BE SLOW

There has been a strong demand for housing avenues in more significant property markets. And we see that family houses’ prices have peaked in California, New York, and Massachusetts. Yet this doesn't signify that residential property prices can increment infinitely. It has started showing signs of slowing growth.

It is an apparent phenomenon that occurs whenever the prices of property outrun the net household incomes. Hence, price growth slows down until the point household earnings catch up. On an aggregated basis, the housing prices in the United States have gone up by just over 5% in the last year. This, along with the demonstration of residential prices slow growth, gives an expectation of 3% price growth in 2020. It can be interpreted differently by different prospective investors. If an investor was waiting for his property to be cashed, this is the right time. If the investor thinks that he should cash his property now to be invested in a higher-end booming market, he should be diligent that he is going to buy at the peak.

For remaining on the safer side, investment in multistory apartments would be a better bet than single-family houses. For this landlord software or rental property software could ease the things up. Another question that might come up is, what to do next? The answer is simple; booming property ends in busting. So, keep track of the local economy. If the economy sails along well, you could keep housing property for years.


VC FUNDS WILL FUEL NEW BUSINESS MODELS OF REAL ESTATE 

In the previous year, there has been a considerable investment in innovative models of real estate. Billions were poured for funding data visualization offerings and iBuyer startups. Perch, an internet-based platform for house selling and buying, had amassed $ 220 million in venture capital funding from FirstMark Capital, fueling its expansion. Real estate giants such as Zillow and Redfin, too, have launched their iBuyer platforms. iBuyer platforms enable consumers to remain in control of their digital transactions by simplifying their selling and buying procedures.

The trend of venture capital investment in new business models of real estate is expected to be continued in the year 2020 as well. There has been some controversy regarding such investments. For example, in the case of SoftBank’s investment in Katerra and WeWork, it was alleged that VC firm had forced layoffs. Despite all, there is sufficient robustness in the market that will drive further investment in mature real estate technology ideas such as property management software.

MILLENNIALS SHALL KEEP ON DOMINATING RESIDENTIAL PROPERTIES MARKET 

In the past year, we have seen that millennials have entirely dominated the home buyers’ market. This is one of the many trends of the real estate industry that we shall see keep on continuing. Many reasons could be ascribed to this phenomenon. As compared to the previous generation X, millennials earn better and have more secure jobs.

Moreover, they prefer to reside in the upper-middle-class or middle-class houses. Although the USA is running short of starter homes, yet millennials would account for more than 50% of new home buyers and shall top the pack of the mortgage. Sellers have many opportunities to take advantage of this real estate trend. They can utilize the power of the internet for marketing their properties on rental property software portals as millennials are more prone to researching a unit before deciding on a purchase. This generation of millennials is more creative than the previous, and they prefer houses with substantially more usable space for their creative pursuits.

WRAPPING UP

We foresee that the year 2020 shall witness strong growth in institutional-quality property's worth. It shall give birth to better opportunities and higher risks for property investors. However, it is a thrilling time as private capital is seeing significant demand for investment and development, yet it is causing prime assets to be intensely competitive. Venture capital firms have opened up new avenues for digital age real estate business models. Smarter people would turn away from luxury apartments to socially responsible, affordable housing programs. Millennials shall be driven by their intense desire to have a house of their own.

Happy Investing! Happy Buying!

May 24, 2018

Things to know about buying a house in summer 2018

Know about buying a house in 2018
You might have heard the conventional wisdom – the best season to buy a house is in spring. Sellers are keen during this time because they can showcase homes better. Gardens are in bloom, the weather is excellent, and spring is nearly always associated with happy events. But what if we told you that if you are a home buyer in 2018, aim for a summer buy.

Summer is typically associated with school holidays, a bit of gardening, picnics when it is not too hot. Although it may not sound like the season in which to embark on a house hunt, you would be surprised to know that plenty of houses get sold in the summer.

Throughout the UK, for example, the general trend is that residential sales have been higher in summer than in spring – every year since 2007.

December 17, 2013

Points to Consider Before Investing in Real Estate

Everyone seems to be rushing in to buy real estate, but very few investors are smart enough to plan their purchases and analyze what type of an investment is suitable for them. For an investment decision that does not keep your awake at night, read on the following points that will help you prepare and plan your property purchase.

Are You Prepared Enough?

September 26, 2013

4 Additional Costs to Budget for when Buying a House

Buying a house is fraught with emotions, last minute panics and finally, the grand pay off. The house, the home, the next chapter in your life. Although, before you cross the threshold, put down the pen, step back from the dotted line and triple check your budget can stand up to these five unexpected expenses on the home ownership trail.

Association Fees

Buying a home or property is a foot-in-door to an exclusive association developed specifically for new and existing land owners (houses, properties, blocks of land – you’re all included), delivering support and a veritable repository of information, including rights charters and advice for landlords regarding tenants, maintenance and miscellaneous advice on things like strata fees, where applicable. Though Australian association membership is not mandatory and the charges are comparatively meagre when held up against the US and UK, the yearly cost is an unexpected hundred dollars or so down and out, prices varying from state to state.

September 25, 2013

5 Property Hotspots in Australia in 2013

When choosing where to buy property you will want to go for an area that your property is going to increase in value. Choosing somewhere that looks good now might turn out to be an issue with reselling later and you may not make a good return on your investment down the track. Here are 5 property hotspots in Australia that are set to boom in 2013 and will gradually increase in value over time.

August 30, 2013

Tips for Buying Your own House

It is becoming increasingly difficult for young people to get their foot on the property ladder these days, especially now the property market has started to recover from the devastating effect of the recession and house prices are starting to climb again. With many banks still nervous about awarding mortgages, you’re doing very well if you’ve found yourself in a position to buy in spite of the economic climate in recent years. But what do you need to know if you’re looking to buy?

August 29, 2013

House or Condo: Which is Right for You?

Whether it's a wide open range, a range hood or a golf range that you prioritise most as an aspect of your home, there is a type of abode that is right for you. The most important balance to strike is the amount of space proportional to your needs, and (a regrettable consideration) that factor in proportion to your budget. Coral Homes has a variety of innovative and welcoming home models on display to cater to any budget and any space requirement. Take a moment to peruse some of these factors which might inform your choice between a home or condo:

April 09, 2013

Hard Money Lenders: An alternative source for borrower

When applying for loans from banks, there are some standards that you must conform to and this makes it pretty hard for most loan applicants to qualify for bank loans. This has with time forced a huge number of loan applicants to search for alternative sources of funding and among these is hard money bad credit loans lenders. In most cases, such lenders provide short term loans and borrowing from them will therefore work great for small to medium financial need.

January 18, 2013

Mechanics Lien - Getting the Right Pay that Your Service Truly Deserves

When a client fails to pay the services rendered by a business despite all the efforts done by the owner, a mechanic lien can be filed. This will allow the owner to claim the right amount for their services in accordance with the law. This can be filed with the local registrar’s office, civil court and other government organization that hold property record. This can be filed by the service provider to ensure that the property which is attached to a lien cannot be sold to anyone.

January 17, 2013

Importance of Hazard Disclosures When You Plan to Sell a Property

The greatest concern of any property buyer, particularly when buying a property that was constructed long back, is the indications of wear and tear, deterioration, and other possible defects. The seller should thus take steps to clear the buyer’s concerns so as to sell the property in a short period of time. This can be assured to the buyer by offering a detailed hazard disclosure report.

December 14, 2012

How to choose a mortgage provider?

If you're planning a move to Bedfordshire, but aren't sure how to choose the right mortgage provider, look no further! Here are some top tips on how to choose reliable, trustworthy mortgages in Bedfordshire that will take the time to find the right deal for your individual needs.

November 30, 2012

Top Reasons to Invest in Melbourne Real Estate

Consistently ranked as one of the world's most liveable cities, Melbourne is in the midst of a population boom yet still holds affordable property for investors. Housing prices have fallen slightly but demand is only expected to increase in the future, making now a great potential time to invest. If you're thinking about purchasing home in Australia, there are several reasons to explore Melbourne and its suburbs in search of potential investments.