Quick Marketing Statistics and General Overview
Home prices increasing by 4.4%
Sales decreasing by 8.5%
States are beginning to open up and so is the housing market in many areas
Unemployment declined from 14.7% in April to 13.3% at the end of May
Rental preferences are shifting. Renters prefer single family rentals at a higher rate than what has been recorded in the last decade
Most class B and C home values and market rents are rising
According to mortgage finance expert Amie McCarthy, we are expecting to see an upswing in activity in the housing market this summer. If an investor is able to keep a finger on the pulse of the market rent trends, it could be in their favor. Since the onset of COVID-19, unemployment has been a concern for many Americans. According to McCarthy, “It is important not to let the COVID-19 pandemic convince you that nothing is going on and you should just be happy if you are collecting anything. The reality is that this is a time of growth in many areas and sectors of the country.” There has been a decrease in unemployment from 14.7% in April to 13.3% at the end of May. Since then, we have seen an increase in mortgage applications for at least six consecutive weeks. Additionally, we are currently seeing historically low interest rates with 30-year fixed interest rates at 3.15% at the end of May, a 50-year low. These low rates will hopefully incentivize the lagging purchase market. Rates will remain here because of monetary policy, investor confidence, and other outside forces.
Another trend that has strongly come through this summer is a renter preference for single family rental units. Single family rental owners have known that this asset is strong as a long-term cash flowing strategy, and the demand for these units is the highest that it’s been in a decade. Class B and C neighborhoods are seeing rising home values as well as market rents. McCarthy closes out the article with the statement: “Do not let that growth leave you and your real estate portfolio behind.”
While the pandemic has been difficult for many facets of the economy, paying close attention to the trends that have been happening this summer, and even before then, could help you decide where to invest. With an anticipated uptick in activity for real estate, investors should strongly consider having a conversation about adding to their portfolio right now. As jobs return and states continue to open up, we should be able to see the benefits of this short, hot summer in real estate.
REI-ink published an article from Amie McCarthy this month about emerging trends and opportunities for investors this summer.