As the entire world deals with the coronavirus outbreak, everyone’s lives have been affected. Changes have happened –be it temporary or for the long haul. There is less certainty about the future. Cambridge rental property owners wonder how COVID-19 will affect the real estate market.
Current economic indicators seem to say that changes are on the way. But not all changes are necessarily 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. Still, you can’t discount the fact that home prices continue to grow as the real estate market proves to be resilient in extraordinary times.
Property owners are wary of a repeat of the 2008 housing market crash. Current high unemployment rates seem to foreshadow many foreclosures as people stop paying their mortgages. But most experts do not see another real estate market crash coming. On the other hand, most experts agree that property equity is likely to decrease as buyers continue to show interest in existing and new homes.
Mortgage interest rates have had multiple reductions over the past months. This is another unexpected change this year. To prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. For Cambridge rental property owners, low rates present a host of opportunities. These can range from refinancing existing loans to lowering your monthly payment to borrowing for your next property at very favorable rates. Because of these low rates, people have rushed to secure financing and lenders. Seeing the high demand, they are tightening their lending criteria. High demand also means longer turnaround times in terms of processes, such as inspections and appraisals. But if you are patient and have a lender on board, you could still enjoy the current rates.
Act now because although experts say that a housing market crash may not be expected, another recession is almost certain. Stimulus funds given by the federal government are still just a temporary fix. While the coronavirus outbreak’s reach is still unknown, and if conditions worsen, no one can really tell what COVID-19’s impact on the real estate market next year will be. Many real estate professionals are adapting to pandemic conditions by innovating with digital technologies. 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.
The new normal calls for these new tools for the real estate market. These will result in improved efficiency & increased energy in real estate investing. As Cambridge rental property investors, you must scout for opportunities to streamline and modernize both your investing and your property management process. Contact us today for help on how to do so, so you 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.
