As the world contends with the coronavirus outbreak, a lot of aspects of life have shifted. Many of these changes may be temporary, but in fact, others may last quite a while. The future seems less certain than it used to be. Hence, it’s normal for Scottsdale rental property owners to question how COVID-19 is changing the real estate market and how those changes may affect you.
Basing on current economic indicators, it’s safe to say that changes are on the way. Nevertheless, that does not indicate that all of the changes will be bad ones. Market data shows that home prices are still rising if at a slow pace. Growth in the first part of 2020 was less than 1%, though that has improved since then. Slower home price growth can thus be good news for you if you are inclined to buy another rental property although it could slow the appreciation of your property values on existing properties.Then again, the fact that home prices continue to grow is a really good sign that the real estate market continues to be resilient in the face of extraordinary circumstances.
This is definitely important because of the fact that several property owners are worried about another housing market crash the same as the one we experienced in 2008 – and for a good reason. With such high unemployment rates currently, it is likely hard to avoid another big wave of foreclosures as people stop paying their mortgages. With that said, most experts do not see another real estate market crash coming. But rather, most agree that property equity tends to decrease as buyers nationwide continue to show interest in both existing and new homes.
An obvious unexpected change this year has been multiple reductions in mortgage interest rates. So as to prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. As a Scottsdale 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. Without a doubt, the low rates have produced something of a mad dash to secure financing, and most lenders are either overwhelmed by demand or tightening their lending criteria – or both. High demand has, in like manner, created longer turnaround times for various parts of the purchase process, from inspections to appraisals. But on the assumption that you are patient and have a lender on board, you certainly should be able to take advantage of current rates.
Doing all of that is vital 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. Quite a lot of real estate professionals are adapting to pandemic conditions by using digital technologies in new and amazingly creative means. With virtual sales, online property tours, and Zoom consultations in their arsenal, real estate brokers, mortgage lenders, and property managers are employing new tools to keep the market moving forward.
It may certainly be that these new tools become the new normal of the real estate market, creating further efficiency and energy in the business of real estate investing. For Scottsdale rental property investors, it’s really necessary to stay vigilant for opportunities to streamline and modernize both your investing and your property management process. Contact us today if you are requiring 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.