Among massive levels a chaos and fear the likes of which have never been seen before there is uncertainty everywhere concerning what will unfold in the future. Fear however is not a good place to make decisions especially financial ones that will impact you and your family. It is okay to feel fear however we can’t let it overtake us and cloud or judgement. SO let’s take a step back and make calculated decisions based off some facts and data coming out from sources such as Realtor.com, Forbes, Zillow.com, and Market Watch.
The responses vary vastly across the YouTube platform from real estate investors on what will unfold in the upcoming months. Some are saying prepare for a devastating crash the likes of which we have never seen before while others are saying we will not feel a thing. I of course don’t have a crystal ball either however will share my thoughts on the negatives and positives I believe can come from what is taking place.
1. Less people seeking to buy homes. When there is fear and uncertainty investors take a step back so as not to make bad decisions. Additionally people don’t want to get sick so they aren’t out shopping; also sellers may considered waiting since open houses bring random people in and who knows who is infected? It was reported that mortgage applications dropped 14% in the last week, that’s down 11% from this same time last year.
2. today it was reported that over 3 million people applied for unemployment last week. That destroys the previous record held from the 1980’s. That creates more people simply trying to figure out how to pay their bills, which might also include their rent. This might detour investors from buying right now.
3. Rent Freeze. The government is allowing those with hardships the right to not pay their rents. This could also adversely impact landlords and cause them hardship as well.
4. Travel and tourist destinations are being heavily impacted as people are now sheltering in place and are discouraged from being mobile. Expect to see heavy impacts in these areas. Short term rentals run through the AirBnB platform are struggling to maintain occupancy.
1. The stock market and real estate market run off different cycles and are impacted by different things. Though they can affect each other, just because one is down doesn’t mean the other will follow. Supply is low and demand is high currently in real estate and according to realtor.com although we may begin to see values drop in many markets others may only feel a slight drop if at all; because the demand for real estate overall is so great.
2. Stimulus. The $2 Trillion dollar stimulus plan was approved putting money in the pockets of Americans to help assist them make their payments for the next few months.
3. Forbearance. Although there is a rental freeze, lenders are also accepting forbearance for landlords receiving hardship as well.
4. Interest rate cuts. Now interest rates are at all time lows. Consider refinancing or restructuring loans on properties that cash flow well that you are planning on holding long term.
5. The cause. The last recession was caused by poor real estate systems. This time however real estate is not the cause. We saw real estate values decline roughly 20% overall in the recession, however currently experts are predicting significantly lower declines with this current situation.
I HOPE THIS HELPFUL. Take this time in quarantine to educate yourself and plan your next investment moves!
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