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The Value of Real Estate Investment

By February 25, 2021June 21st, 2024No Comments

Investing in real estate often takes a keen eye, a bit of expertise, and an iron stomach. As we’ve entered the new year, many of our readers and clients are asking the same questions. Should I invest in real estate? Can I trust the real estate market to be stable? How do I know if I’m getting a good deal? To answer these questions, there’s a lot we need to examine. 

Mortgage Rates

Mortgage rates hit an all-time low in 2020, dropping down to 2.67% by December of 2020. According to The Mortgage Reports, that number has stayed consistently under 3% and now hovers at around 2.81%. These are numbers we haven’t seen since the 2008 housing market crash. The only difference is that this is actually good news for most Americans. 

If you’re going to apply for a 30-year mortgage rate, you want that interest rate to be as low as possible. Experts project that interest rates will stay below 3% during 2021, which is a positive sign for real estate investment. As long as we have a stable housing inventory, our current market environment will create opportunities to invest in real estate.

Vaccine News

With news of Covid-19 vaccines and national distribution plans taking effect, the U.S. economy should begin to stabilize. In 2020, we hit an economic recession that almost toppled our national economy. We’ve already started to heal, but as more and more people get the Covid-19 vaccine, things will slowly return to normal. People will start going out, businesses will pick back up, and our national economy will get a significant boost. As a result, real estate investment will become more attractive to investors because stability equals low risk.

It also makes buying and selling real estate a lot easier because it’s much simpler to make those deals in person. While the market has adjusted to accommodate virtual tours and digital listings, it hasn’t been easy. We’ve lost the ability to physically attend an open house meet or visit an investment property in person to assess interest and value. These are all essential components of real estate investment that should return once the vaccine is fully distributed to the public.

Low Risk, More Control

All of this works in tandem. We’ve mentioned this already, but as the economy begins to stabilize, real estate investment becomes less risky. When you’re talking about investing, risk aversion is a critical component that can make or break your success. Of course, high risk sometimes yields high rewards, but it’s much better to focus on stable investment opportunities. Luckily, experts say that the market will be incredibly stable over 2021, which gives you a lot more control over your portfolio.

Of course, you must act fast if you want to take advantage of this trend before prices get too high. With the normalization of the housing market, a feverish generation of new buyers, and a more stable national economy, if you invest in real estate now, you’ll get in right at the perfect time, and you can watch huge returns as home values increase over the next few years.

The Downside

Inventory hit an all-time low in 2020, which bled into 2021. This kind of environment creates a ton of buyer competition, which is known to drive up prices. As we enter a seller’s market, it’s not always the best time to invest. So, keep track of what’s happening in the real estate market at all times. While inventory numbers should rise, stay aware of property value, understand your local market, and be smart about where you invest. 

So, Should You Invest in Real Estate?

Yes, you should – but you should also be careful. The real estate investment market is in great shape right now, but there’s a right time and a wrong time to invest. If you make the right moves this year, you could secure your future and the future of your family. Mortgage interest rates are low, the economy is beginning to stabilize, and home values are right where you want them. This won’t last forever, though, so it’s imperative that you do your research and keep an eye on trends.

When you’re looking into investment properties, it’s wise to consult an expert who can offer advice and provide professional guidance. If you’d like to discuss real estate investment in Northeast Florida, contact the Welch Team today. We’d be happy to walk you through some new opportunities!

So, Should You Invest in Real Estate?

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