Creating great investments with the uncharted territory that is 2021 Real estate
Coming out of the unexpected market conditions that 2020 gave us with pandemic re-evaluation of most everyone’s living environment, we started 2021 with the same uncharted territory.
Low interest rates, low inventory and pent-up demand for housing brought 2021 in with a buying frenzy most people have ever experienced. Multiple offers on most every home and forget about getting a good deal, you are expected to be happy just getting a deal.
Everyone is looking to see when this will end and what is in store for the latter half of the year. To this I want to Share with you what I anticipate based on my numerous conversations, interactions, and diligence within the real estate community.
Interesting points
· Housing prices are expected to continue to remain high through remainder of 2021 throughout most of the country and in parts of some parts of country into 2022. However, do not expect prices to drop but price increases will decelerate.
· Seasonal local market fluctuations still expected to take effect> Northern states, looking at your end of summer history.
· Mortgage rates are suggested from within the mortgage industry to stay within the area of 3% through remainder of 2021 however rumblings of raising these rates are becoming more prevalent lately so we want to watch these closely for any surprise moves.
· Commercial real estate investing within the medical arena may be strongest investment class followed by industrial. Meanwhile retails and office investing will be weak as a result of post covid work at home initiatives and conveniences of online purchases.
· Residential investing in real estate remains extraordinarily strong as this is an affordable investment for mom-and-pop investors who are aiming to hedge against inflation. With a very strong demand for rental housing most investor is bullish on residential single-family homes and small multifamily dwellings
· Urban areas will become more highly sought after while large cities and especially inner-city investing will become less desirable. Most everyone has re directed their personal living styles post covid and there appears to be a mass exit from the high densely populated areas as social distancing has become much more prevalent today. In fact, if you are looking for deals you may find them in inner cities albeit demand for the properties will be diminished so think Highest and best conversion if you want to win in these areas. The pre pandemic rent levels may not return for a long time at currently uses.
· Lots of migration is happening, huge cities and especially those highly taxed states are seeing a mass relocation to other states with more user-friendly landlord tenant laws and less taxation.
· Evictions will be big in latter half of 2021 as eviction moratoriums are lifted. Landlords cannot continue to let tenants living in their units for free. low-income tenants will have a struggle finding affordable housing and especially those who have tainted rental history from the past covid job losses. A large shuffle in low-income tenants will be unfolding now.
· Housing reform and affordable housing will be the focus for landlords and tenants alike. If you wish to be prevalent in creating affordable housing in your areas, please watch for housing reform meetups and take an active role in creating affordable housing. This may prove lucrative as solving needs typically lead to great things.
While we investors continue to navigate through uncharted territory. investing with a mindset of creating win-win situation and solving problems for the masses will be the key to great investing.
Many people need affordable housing. As investors we have benefited greatly in the past from rising rents. Ask yourself now. How can I assist in solving affordable housing crisis while creating great investments for myself? As we all figure this out within our own communities we will have recharted the path for the future as we face similar challenges to that which we found over the past couple of years.
The author’s opinion cannot be construed as tax or legal advice, and may not represent the views of HTBUSA or its stakeholders. HTBUSA is not a legal service or professional tax service. As with any investment, there is an inherent risk in investing in real estate..