Is Real Estate A Good or Stable Investment In 2020?

  • 02/10/2020
  • Jiso
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Many investors have switched to the stock market as a place to place their investment dollars. Although stocks are a well-known investment option, not everyone knows that it is also considered an opportunity to purchase real estate. It is of the other ways to invest. Real estate can be an alternative to stocks in the right conditions, offering lower risk, yielding better returns, and providing greater diversification.

The coronavirus has created all sorts of stories that make opportunists think, is it a good time to invest in real estate now? Of course, the answer is YES. Do people still need houses? Can service companies work without having a local? Does tourism still exist? Currently, 2020 is an ideal time to invest in real estate. 

Why? Since, first, coronavirus rates are decreasing, and you’re going to be able to take advantage of these rates until they’re over. And so, even though it’s not a great real estate market where you live, you can now buy anywhere in the world. Yeah, first you need to root out the scams, but like any business online, that’s the rule, and it’s easy to find big, credible brokers and firms in that sector.

Here are key reasons why Real Estate is a good investment at this time

Reduced Mortgage Rates

A few months before the coronavirus’s first cases were reported in the US, the real estate market was already benefitting from a low mortgage rate. However, shortly after the coronavirus was declared a pandemic by the WHO, the Federal Reserve intervened by trying to boost the US’s economy during the hard times. Federal funds rates were slashed, bringing about an interest rate of almost 0{0e8c7da5d156b6bc33435e3c29366dba0a5bd8299c8cbdf63bde0efe403f69e8}. Reduced mortgage rates can help investors save a lot of money when investing in properties. It is unlikely that this low mortgage rate in the US will increase anytime soon.

Motivated Retailers and Fewer Business Customers

Brian Davies, a co-founder of SparkRental.com and a real estate investor, states, “Now is a great time to find deals, particularly on distressed properties. Even with a suspension of most foreclosures, some homeowners and landlords will inevitably be eager to sell, even at a sharp discount. Many buyers have also pulled out of the market, but most listings remain active, creating a temporary oversupply of homes compared to the compressed demand. That won’t last, however. Demand will reassert itself once the epidemic passes, and meanwhile, construction projects will have stalled for several months at least.”

As rightly pointed out by Brian, there is less competition to face as a buyer in a period like this.

Better Stability than Stocks

The stock market has gradually grown volatile since the emergence of the coronavirus. There is no doubt that diversification in long term investments such as real estate, is a better strategy for any investor than the stock markets. 

Weakening Prices

The Federal Reserve Economic Data (FRED) stated that the median sales prices of houses sold in the United States have to weaken since 2017. Considering the happenings after the peeks in late 2006, median sales prices went from about $255,000 down to $210,000 (about 17{0e8c7da5d156b6bc33435e3c29366dba0a5bd8299c8cbdf63bde0efe403f69e8} less) for two and a half years (2.5years). Prices of houses gradually rose from 2009 until 2012 before it spiked up 55{0e8c7da5d156b6bc33435e3c29366dba0a5bd8299c8cbdf63bde0efe403f69e8} from $220,000 to $340,000 in 2017.

Conclusion

The best way to determine whether or not now is a good time to invest in real is to approach and seek experts’ opinions. They would provide better advice on whether investing in real estate opportunities is the best thing to do. Financial advisors and mortgage lenders are also able to offer better advice as regards obtaining loans.