With the coronavirus outbreak, many aspects of life have changed. Though some changes are temporary, others might last a while. The future is much less certain. Because of this, some Downers Grove rental property owners are wondering how COVID-19 is affecting 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. Even if growth in the first part of 2020 was less than 1% but it has improved 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. The fact that home prices continue to grow is a good indicator that the real estate market has resiliency in these extraordinary circumstances.
Property owners are wary 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 coming. On the contrary, they agree that property equity is likely to decrease as buyers nationwide continue to show interest in both 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. These low rates offer a lot of opportunities for the Downers Grove rental property owner. 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. Expect longer turnaround times from inspection to appraisals as high demand continues. Patience is a virtue, so they say. It couldn’t be truer! As long as you already have a lender on board, you can still take advantage of the current rates.
Doing this is important because even when a housing market crash is not on the horizon, another recession is almost certain. Although the stimulus funds given by the federal government may have delayed the worst of it, such a fix is still temporary. As conditions worsen and the extent of the coronavirus outbreak is still unknown, experts aren’t able to predict the impact of COVID-19 on the real estate market next year. Many real estate professionals are adapting to pandemic conditions by using digital technologies in an innovative way. 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 in the real estate market. Use these to increase efficiency and energy in real estate investing. For Downers Grove rental property investors, it is vital to stay abreast of leads or opportunities to streamline and modernize both your investing and your property management process. Contact us today for help on how to do so, that way you can successfully make it through whatever the future may bring.
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