The coronavirus outbreak has turned our lives upside down. Changes have happened –be it temporary or for the long haul. The future is much less certain. Hampton rental property owners wonder how COVID-19 will affect the real estate market.
Based on current economic indicators, it’s safe to say that changes are on the way. However, these changes won’t all be negative. Market data shows that home prices are still rising, if very slowly. Growth in the first part of 2020 was less than 1% but it’s been showing an upward trend since then. Slower home price growth may be good news for you if you are ready to buy another rental property but may slow the appreciation of your property values on existing properties. Seeing that home prices are continuing to grow means that the real estate market continues to be resilient during these extraordinary circumstances.
Property owners would do well to take note of this, as there is the fear of a repeat of the 2008 housing market crash. They are afraid the high unemployment rates right now will lead to foreclosures as people stop paying their mortgages. But most experts do not see another real estate market crash on the horizon. Instead, they tend to agree that property equity is likely to decrease as buyers all over the country show interest in existing and new homes.
Mortgage interest rates have had multiple reductions over the past months. This is another unexpected change this year. To prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. For Hampton rental property owners, these low rates mean more opportunities. These can range from refinancing existing loans to lowering your monthly payment to borrowing for your next property at very favorable rates. Understandably, the low rates have created a rush for most people to secure financing, hence lenders have become overwhelmed by demand or are tightening their lending criteria. High demand has also caused longer turnaround times in the purchase process from inspections to appraisals. It pays to be patient. As long as you have a lender on board, you are likely to enjoy the current rates.
It is important to do this because even when experts do not expect a housing market crash, another recession is almost certain. Stimulus funds given by the federal government are still just a temporary fix. With the coronavirus outbreak trajectory still unknown, industry experts can’t really tell how COVID-19 will impact the real estate market next year especially if conditions worsen. Many real estate professionals are adapting to pandemic conditions through innovations in digital technologies. With virtual sales, online property tours, and Zoom consultations in their arsenal, real estate brokers, mortgage lenders, and property managers are using new tools to keep the market moving forward.
These new tools are the new normal of the real estate market. These will make real estate investing more efficient and full of energy. For Hampton rental property investors, there are sure to be many opportunities to streamline and modernize your investing and your property management process. Contact us today for help on how to do so, so you successfully make it through whatever the future may bring.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
