Most people buy homes depending on the timing in their lives rather than the state of the real estate market. On the other hand, their decision to buy a property is based highly on the neighborhood property value as well as the investment value of the property. There was a brief trend that emerged in 2010, that saw a 32% uptick in the urban real-estate market. The emerging market however, is comprised mainly of millennials and retirees, who are gradually moving more toward the suburbs.
The National Economy
Investing in property based on the current national economic climate is a blind-call. The American economy is cyclical, ebbing and flowing periodically in cycles ranging from 5 – 10 years. Macroeconomic indicators in the current climate would suggest that the economy is on the brink of a flux.
Real-estate across the country
The real-estate market specifically is currently seeing a general mellowing in both supply and demand. Is this the beginning of a drop in the real-estate market? If you are looking at investing, the smart thing to do, is to gauge your investment, based on the hyper-local economy, rather than the national economy. Remember that real-estate markets are local and despite a downturn in national real-estate trends, there are going to be areas that thrive.
Suburban real-estate and Luxury investments
With increasing trends like remote working options, entrepreneurship, a rise in smart homes and urbanization, there is a major flux from the urban to the suburban. Recent trends in real-estate seem to suggest that millennials are increasingly ditching city life for the spacious and laid-back suburbs. This bodes well for suburban real-estate markets located just outside major metropolitan areas.
Over the past 2 years there has been a marked deceleration in rent- rates across the country. From a 2.6% hike in 2015 and a 2.8% hike in 2016, 2018 saw only a 1.1% hike. This however, is a larger national trend. Locally, the real-estate market tells a different story. Pockets in Orlando, Las Vegas, Phoenix and Tennessee have actually seen a hike in rent rates that is far above market value. While rent-rates in certain areas in Buffalo, Oregon and Seattle have actually dropped below last years average.
In conclusion, the current atmosphere is not feasible for those looking for a short-term investment in the real-estate market. The safest and most valuable bet for buyers, would be in a 20-year market. ‘Invest wisely” is an understatement, however gauge your hyper-local real estate trends carefully before you consider investing in any property.