As the entire world deals with the coronavirus outbreak, everyone’s lives have been affected. Changes abound –temporary or otherwise. Regardless, the future does seem a lot less certain than we would like it to be. With all of this happening, McDonough rental property owners are beginning to think about how COVID-19 might affect the real estate market.
Based on current economic indicators, it’s safe to say that changes are on the way. But remember, not all changes are bad. Market data shows that home prices are still rising, if very slowly. Growth in the first part of 2020 was less than 1% but there have been improvements showing since then. Slower home price growth may be good news for you if you are ready to buy another rental property but may slow the appreciation of your property values on existing properties. Seeing that home prices are continuing to grow means that the real estate market continues to be resilient during these extraordinary circumstances.
Property owners are afraid that a housing market crash similar to the one in 2008 will happen. They are afraid that the high unemployment rates might bring about a lot of foreclosures as people stop paying their mortgages. But most experts say that another real estate market crash does not appear to become. Instead, they tend to agree that property equity is likely to decrease as buyers all over the country show interest in existing and new homes.
Multiple reductions in mortgage interest rates have also been an unexpected change this year. To prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. These low rates give McDonough rental property owners many opportunities. You can refinance existing loans to lower your monthly payment or borrow 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. High demand also means longer turnaround times in terms of processes, such as inspections and appraisals. Be patient, get a lender on board, and enjoy the current rates.
Doing this is important because although experts don’t see a housing market crash happening, another recession is almost certain. Stimulus funds given by the federal government are still just a temporary fix. As conditions worsen, and since the coronavirus outbreak still leaves a lot unknown, industry experts still don’t know COVID-19’s effect on the real estate market next year. 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 may now be the new normal for the real estate market, resulting in efficiency and energy in real estate investing. For McDonough rental property investors, there are sure to be many opportunities to streamline and modernize your investing and your property management process. Contact us today for help on how to do so, so you can 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.
