As the world contends with the coronavirus outbreak, so many aspects of life have shifted. Most of these changes may be temporary, even while others may last quite a while. The future seems less certain than it used to be. Thus, it’s understandable for Houston rental property owners to contemplate on how COVID-19 is changing the real estate market and how those changes may affect you.
With reference to current economic indicators, it’s safe to say that changes are on the way. Even though that does not point out that all of the changes will be bad ones. Market data shows that home prices are still rising if just bit by bit. Growth in the first part of 2020 was less than 1%, nonetheless, that has improved since then. Slower home price growth would be good news for you if you are eligible to buy another rental property even though it may slow the appreciation of your property values on existing properties. On the other hand, the fact that home prices continue to grow is a very good sign that the real estate market continues to be resilient in the face of extraordinary circumstances.
This is mainly significant given that some property owners are careful of another housing market crash such as the one we experienced in 2008 – and for a good reason. With such high unemployment rates at present, it sounds hard to avoid another big wave of foreclosures as people stop paying their mortgages. Still, most experts do not see another real estate market crash coming. But instead, most agree that property equity has a tendency to decrease as buyers nationwide continue to show interest in both existing and new homes.
A clear unexpected change this year has been multiple reductions in mortgage interest rates. So that it’s possible to prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. As a Houston rental property owner, such low rates present several opportunities. These can range from refinancing existing loans to lowering your monthly payment to borrowing for your next property at very favorable rates. Certainly, the low rates have developed something of a mad dash to secure financing, various lenders are either overwhelmed by demand or tightening their lending criteria – or both. High demand has likewise created longer turnaround times for several parts of the purchase process, from inspections to appraisals. However, provided that you are patient and have a lender on board, you should actually be able to take advantage of current rates.
Acting this way is precisely necessary because while a housing market crash may not be expected, experts predict that another recession is almost certain. While stimulus funds from the federal government have helped delay the worst of it, such a fix is temporary at best. As conditions worsen, and with the trajectory of the coronavirus outbreak still unknown, industry experts don’t know how COVID-19 will affect the real estate market next year. Numerous real estate professionals are adapting to pandemic conditions by using digital technologies in new and innovative measures. With virtual sales, online property tours, and Zoom consultations in their arsenal, real estate brokers, mortgage lenders, and property managers are opting to use new tools to keep the market moving forward.
It can possibly be that these new tools become the new normal of the real estate market, resulting to further efficiency and energy in the business of real estate investing. For Houston rental property investors, it’s crucial to stay vigilant for opportunities to streamline and modernize both your investing and your property management process. Contact us today if you need help on how to do so, so you successfully make it through whatever the future may bring.
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