A variety of new factors are changing real estate values and demand. Here’s what investors should know now…
Overall Demand For Real Estate
Real estate values have continued to buck expectations since the first quarter of 2020. In spite of recent events, property prices seem to have kept on going up. This seems largely due to both many homeowners restructuring their residences and where they want to live, as well as a large shift out of other types of investments, and into real estate.
Even though the stock market seems to have kept rising as well, few savvy investors believed the lofty prices of public stocks are justified or based on real fundamentals. Even Goldman Sachs has finally warned that it expects stocks to fall at least another 18% in the next few months.
Smart investors see real estate as safer and more profitable than public stocks, bitcoin and even gold.
New Flood Maps
Newly released flood maps could soon dramatically change the values of 6 million properties across the US. New maps show these properties are in danger of flooding. That could decrease their appeal to buyers, or at least mean new and higher insurance premiums for owners and buyers.
The summer of 2020 has already proven to be one of the bloodiest and most violent in many years for many US cities. Gun violence is up dramatically, and the Governor of Georgia even activated the National Guard to patrol streets to deal with the new surge in street crime. Unless unemployment stats turnaround quickly, this may remain a rising trend for a while.
From recently graduated singles to young families with kids and seniors, many are considering moving to safer and less impacted neighborhoods and areas.
Rural America Is Sold Out
For the first time in years, if ever, rural real estate agents and investors are finding they are sold out of properties. Many factors are combining to drive more demand to suburban and rural properties.
While companies should have been working remotely for over a decade, they now have no choice. This massive shift could send tens of millions of American households on the move to less expensive areas with more space for their money.
For several years we’ve seen buyers and renters more willing to embrace more remote properties, providing they have cell signal and WiFi for work. Now, with the paranoia around 5G, not having any signal may even be a feature some are actively seeking out.
This can be great news for real estate and note investors who have acquired pools in the past and can now see some of the best value being created in these assets.
With mortgage lending tightening up for retail home buyers, rentals are only going to be more in demand, with more tenants competing and occupancy rates likely to rise.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund