With a time as volatile as the COVID-19 pandemic, many investors are wondering if the real estate market is still viable with new lockdowns approaching and time still left from now until the vaccine is fully rolled out. There are many assumptions that can be made in such uncertain times, in terms of whether people are still buying/selling. The initial reaction is to assume everyone is staying put and pausing on real estate endeavors until things calm down. While that was true for the first two months of the lockdowns, the reality today is that these new set of circumstances has brought about new opportunities and people are still buying at rates that can be great for continued investment. The keys to making the most of the situation are patience and balance.
Are people still buying?
The short answer is yes. While the level of job losses are a factor to consider, the lower interest rates have many clamoring to take advantage while it lasts. While commercial real estate is in question with remote work and business closures, there will always be demand for more housing. Residential real estate can provide wonderful investment opportunities, even in times of distress and economic downturn.
Work-from-home
With many jobs (especially tech in the Bay Area) going remote, this has created demand for more inland properties in the East Bay. Now that many companies are considering a hybrid work from home model, workers can do long commutes, fewer days of the week. The demand for more home space and indoor amenities is also provided by more affordable options away from the expensive, densely populated city center.
Interest Rates
Mortgage interest rates have been trending downwards since the 2008 financial crisis. It currently stands at ~2.5%, which is very manageable for most new prospective homeowners. This level of affordability is more relevant now than ever, considering the increased demand for homes outside the city.
Impact on the Cities
According to a Senior Economist at realtor.com, “Americans [have] discovered that existing homes were not adequate for the new work, teach, exercise, cook and live at home reality”. This new reality has been a major factor towards the exodus of millennials from the cities for the past few years and that trend accelerated further due to the pandemic. We have seen a rise in desire for finding a place people want to live, rather than wherever their jobs tie themselves down to. The lower interest rates have also been contributing to the increased number of buyers on the market.
East Bay Investments
Our investment firm is currently in the process of acquiring multiple properties in the East Bay to meet the current level of demand. We foresee many opportunities for investment and are using our proprietary technology and experience to get the highest possible ROI. Our previous experiences with real estate and construction management puts our firm at an advantage over others. Please don’t hesitate to call us to find out more about our current proposals!
510-344-6368
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