With the New Year almost at the door, real estate investors have already started planning their new moves for 2019. They are busy exploring new opportunities for growth and higher return. Similarly, the market trends are also changing, and fresh discussions are going on about how good or bad 2019 will be for real estate investments. While nobody can rightly predict the housing trends that will prevail next year, a sound guess can yet be made based upon certain reliable information. So let’s go ahead and check out what we can expect for twenty-nineteen.
Major factors that will affect real estate investment 2019
Sales and Prices
Though home sales are increasing gradually, yet they are still low in comparison to the growth of households. With the ever-increasing new home constructions coming up now, you can find more purchasers for a home, as investors or owner-occupiers.
The locality diversifies the prices. Although the overall property price has hiked over the last few years, yet it can be said that the market of real estate is somewhat granular. This can be seen in 2019 as well. So if you are planning to real estate investment in 2019, learn why houses in a particular locality are fetching higher than others.
The industry of real estate is facing the problem of affordability. Many people wish to buy homes, but they can’t afford in their present geographical region. Affordability has become an acute issue. Demographics of the housing market had constantly been fluctuating between 2012-2013, increasing back again.
However, numerous markets have not been steady since then. This is leading to uncertainty. This is threatening the potential first-time home purchasers. The purchasers, who are ready to tolerate the risk, have a confined supply of houses for sale. This is inculcating volatility in the markets and may keep the prices higher or make them rise.
So there’s a possibility that the potential buyers may turn into long-term renters. What does this mean to real estate investors? Well, they may prefer investing in buy-and-hold rentals. Remember an overpriced marketplace isn’t the best place for seeking smarter deals.
The mortgage rates tend to fluctuate depending upon factors including economic growth, inflation, and trends of the housing markets. The mortgage rates for 2019 is expected to go north by a narrow percentage.
Though the market of real estate is flat for 2019 when viewed from a broader perspective, yet many actions are expected to take place at a micro level. There are many pockets across large cities and metros where prices of properties are quite reasonable, and the real estate investors can hope for a good return.
The rental yield is expected to be better for residential properties in comparison to commercial properties. The major point to consider today is that, unlike before, the value of real estate’s would not possibly double in 3 to 4 years. Rather real estate’s would now take 7 to 8 years to face a 2X growth in their value.