Should You Invest in Real Estate This Year?

According to a UBS survey on investor sentiment, 69% feel bullish about investments and expect the economy to continue to grow in the coming months. There’s also a lot of people planning to invest in assets, including real estate, as a way to protect their portfolios from inflation. Reports suggest that U.S. investors are considering real estate more than ever before – but is this a good idea?

 

Although it may sound appealing initially, investors need to assess several key factors before jumping on the bandwagon. And here’s what you need to consider before investing in real estate this year.

 

You can take advantage of opportunities for cheaper real estate.

 

The government has taken a lot of steps to boost the country’s economy. For instance, the Federal Reserve has lowered its interest rates to encourage more investments to enter the market. Indeed, this can be really advantageous for interested parties because the interest rate for 30-year mortgages is currently at 3.2%, while it’s at 2.3% for 15-year house loans.

 

Additionally, the moratorium on foreclosures for government-backed mortgages will only be extended until July 2021. This may seem like a lot of homeowners selling their properties at more affordable prices to avoid foreclosures. So if you’re interested in buying properties at a cheaper rate, you can take advantage of these opportunities.

 

There is a continuous rise in real estate prices.

 

It seems that remote working will be here to stay, which is why more individuals are willing to spend greater amounts of money on better housing. Since the beginning of the pandemic, Zillow reported that the value of homes has increased by 11.4%. Furthermore, it is predicted that home prices will continue to rise by 6.3% next year.

 

This is great news for investors since it guarantees real estate appreciation in the coming years. In addition, if you take advantage of the Fed’s lower mortgage rates and other opportunities, you can purchase an affordable property that will increase its worth over time.

 

The rental market is shifting and migrating.

 

People are really looking for more affordable housing options because the population in certain states is growing, while major cities are experiencing a mass exodus. For example, apartment tenants and even large companies like Tesla and Oracle Corp. have moved from San Francisco and New York to more affordable areas in Austin and Phoenix during the pandemic. In addition, due to remote working options and high costs of living, people are opting to live and work from areas where they get to enjoy bigger land areas for lower costs.

 

This is why an article on key considerations before buying a property by Marcus emphasizes that investors need to do their “homework.” This includes researching the market—getting expert analysis as much as possible—to determine whether an investment property will increase in value over several years. The market trends can drastically change over time due to unexpected events like the current pandemic. So, you need to assess if you can handle having a property that might sit empty for some time or dealing with renters who cannot pay their bills on time. If these scenarios aren’t viable, you might want to pass on this particular type of asset.

 

Millennials are on the lookout for new homes.

 

The real estate market is growing rapidly, mainly because the nation’s largest demographic group has increased its interest in purchasing or renting housing options. Our feature on ‘Amazing Millennial Real Estate Trends in 2021’ notes that over 70 million millennials are waiting to enter the real estate market. However, this generation definitely has a preference for properties because most of them go for newly built or renovated homes and sustainable housing options.

 

This is good news for investors planning to purchase real estate, as the biggest generation of Americans will be added to your customer base. To get their attention, though, you may need to renovate or build the property according to their preferences. Value-adding amenities such as ParqEx’s Access + Premium have proven to be a draw for this group.

 

It’s great to invest in real estate properties this year, especially if you take market trends and cost-saving opportunities into consideration. Take advantage of the lower prices, especially if they’re in the areas that tenants prefer.

 

By Jennifer Vennisha

 

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Are you looking to invest in real estate and property management technology? Let’s talk! Book a demo with ParqEx. We look forward to hearing from you.

Amazing Millennial Real Estate Trends in 2021

 

A millennial might be a term that causes an eye-roll in most conversations, but when it comes to real estate, the millennials are outright leading the pack. This is due, in part, to have had time to grow in their current career options or maybe recently having paid off their student debt, leaving them with a few extra dollars, ready to invest in property. 

For those millennials not quite so taken by van life, investing in real estate is the next option. So whether you’re buying your family home or investing in a condo or loft in a beautiful city, these are a few of the millennial real estate trends we’ve spotted in 2021.

 

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Entering The Real Estate Market

 

Innovative ideas to combine technology, environmental consciousness, and location seamlessly slip into their new roles as homeowners. With the millennials’ flair for making the most of what they’ve got, the boomers might soon be looking to the millennials to help navigate the new real estate markets. 

 

Millennials make up the largest demographic in the nation, with over 70 million millennials eagerly waiting to enter the real estate market, making up most of the home-buyers market at a whopping 53.7% in Dallas alone, for example. A study conducted by the National Association of Home Builders concluded that despite a few millennials still choosing to live in the quiet greenery of suburbia, there are a great many of them that are preferring to settle in the city.

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With the rise in popularity of gentrification of inner-city suburbs, many millennials are choosing to settle there for many reasons such as accessibility, high-end retail stores, terrific restaurants, and vibrant nightlife. The beautiful Uptown Dallas Apartments to Rent in Dallas is a thriving example of the rise of new urbanism with walkable neighborhoods and various housing options.

Millennial Real Estate Buyer Trends

 

With the economic aftermath of the pandemic still in motion, real estate has only recently become more affordable to millennials. This results from an all-time high national savings rate and the steady decline in interest rates, encouraging more buyers into the market.

 

The majority of millennial buyers seem to prefer newly built homes or recently overhauled or renovated properties.

 

Due to the unparalleled perks of buying a new home, such as having a decreased chance of peril claim, meaning you will be more likely to get coverage for home insurance, millennials opt to buy new homes. Along with this, the older millennials (26-35 years old) are choosing to invest in smart home options that increase ease and comfort. You have your entire house connected to the palm of your hand via your smartphone. This includes lights, your thermostat, security systems, and even your refrigerator and coffee machine.

Millennial Real Estate Sustainability Trends

 

Sustainability is a buzzword almost synonymous with millennials, and the real estate market is no different. Going off the grid was recently reserved for odd families on the Discovery Channel, but millennials have taken this notion and made it an option for your living space. Although gentrified or not, living in the city means less commute time, leaving a less significant carbon footprint. The access to walkable neighborhoods, parks, diverse business opportunities, and having your community right outside your front door is a big factor in drawing millennials to downtown and uptown developments.

 

Another user-friendly aspect of sustainable living is the opportunity to cut your monthly costs by between 20% and 30%. Using the sun to power appliances like heating and power, you save a tremendous amount on power bills.

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When it comes to sustainable homes, millennials are showing a knack for creating a living space that is as beautiful as it is functionally sustainable. 

 

One of the fascinating trends noticed regarding millennial homebuyers is the sudden move out of big cities like New York and Los Angeles. For decades it has been a solid trend that young professionals flock to the bigger cities searching for jobs and dreams, but recent findings from SmartAsset have shown that in 2019 alone, 40,000 millennials left New York City. Most recent migration patterns have shown millennials flocking to cities in states with no taxes on income or salary. These cities include Austin and Frisco in Texas, Seattle, Washington, and Henderson, Nevada. 

In Summary

 

Whether you’ve just paid off your student debt or just started a family, it seems that the real estate market is very much on the side of the millennial with eco-friendly, sustainable living available almost everywhere, no matter where you find yourself migrating to. 

 

Author: Wendy Dessler of The Blog Frog

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