Just as Einstein showed great fortitude on completing a simple task, we investors must show our strong-mindedness to pursue our investment goals. It is especially tricky in the year of the Coronavirus because of its effect on investment inventory and reluctance to travel and to meet other people – the formula required for all investors. With every economic reversal comes opportunity. You must be patient, remain optimistic, and vigilant for that one good deal. It is out there; you just must stay alert. And like Einstein, once you set that goal, make it difficult for you to deflect from it.
Here are two opposite pieces of news for you to consider. The first describes the inventory shortage in the residential housing market. The second list the hottest markets in the country in 2020 for rental investment properties. The point being there is always an opportunity, you just have to find it. As they say, "if it were easy, everyone would be doing it." Another way to look at it as because of market shortages, you will find far less competition.
Shortage of Inventory
Record-low mortgage rates and shortage of inventory has kept the US housing market strong with respect to buyer demand. But, significant uncertainty remains for the housing market going into the fall, as the economy faces a long and bumpy recovery in the upcoming months. Nonetheless, real estate is still a hot seller's market and improved selling prospects are a good sign and will need to remain on that path to bring more homes into the market.
With unusually high buyer interest this late in the homebuying season, buyers are moving much faster than this time last year to beat out competition and lock in low mortgage rates. The national median listing price on Realtor.com was $350,000, up 10.1 percent year-over-year while prices rose 8.9 percent in larger markets. While rising prices are making sellers rejoice and list more & more homes, the buyers are worried as home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.
The new listings are quickly taken out of the market from heavy buyer competition. Therefore, housing units are still in short supply with unsold inventory sitting at a 3.1-month supply at the current sales pace, down from 3.9 months in June and down from the 4.2-month figure recorded in July 2019. This figure is a sign of a strong seller's real estate market. The national inventory has declined by 36.4 percent year-over-year, and inventory in large real estate markets has decreased by 38.1 percent in August.
Significant uncertainty remains for the housing market going into the fall, as the economy faces a long and bumpy recovery in the upcoming months. Nonetheless, real estate is still a hot seller's market and improved selling prospects are a good sign and will need to remain on that path to bring more homes into the market.
Do not be discouraged by the news, as there are still great investment opportunities available in the market, though not as many of them. This means you must search more rigorously and when you found the right investment you will be rewarded with a historically low mortgage rate.
The Top Hottest Rental Property Market for Investors in 2020
· Fayetteville-Springdale-Rogers, AR-MO Metro Area
· Colorado Springs, CO Metro Area
· Olympia-Tumwater, WA Metro Area
· Crestview-Fort Walton Beach-Destin, FL Metro Area
· Raleigh, NC Metro Area
· Stockton-Lodi, CA Metro Area
· Charlotte-Concord-Gastonia, NC-SC Metro Area
· Provo-Orem, UT Metro Area
· Greeley, CO Metro Area