Tellakos | Are you interested in investing in the real estate sector or purchasing a home that will act as your primary residence? You should ensure you are equipped with enough knowledge about the real estate market before you can close any deal. Which factors should you consider when it comes to the real estate market?
The main things that you should know include:
1. Housing Supply Statistics:
There are instances whereby the demand is high, but the supply is low. On the other hand, the home sales would rise. As long as there are no building restrictions, the supply will rise eventually. Ensure you are up to date with such statistics by keeping track of the housing news. The low-interest rates have also led to an increase in the demand for houses.
2. The Price Usually Makes or Breaks the Deal:
As you acquire a home, some of the major factors to consider include the price. It is advisable to acquire a home when there is a buyer’s market, which means the market favors the buyer. As per the housing news, in the past two years, the market has favored the sellers considering there is a huge demand, yet the supply is low. The low mortgage interest rates also play a crucial role since they allow many people to acquire homes easily.
When each of these factors s combined, the seller market becomes stronger, and the real estate prices are high. The average price for a home in 2020 was $320,000. The prices would vary depending on factors such as location. Nevertheless, the entire U.S. is a seller’s market at the moment. Depending on your budget, you can consider waiting for signs that the house prices are about to go down.
3. Timing and Location Matters:
In real estate, one of the major factors to consider includes the location of the property. The only issue is that you cannot change the location once you have made an acquisition. The location of a house will have a direct impact on its value. Additionally, you should keep in mind that a home depreciates with time; however, the value of the land will rise. Before you consider the type of home you want, first determine the most suitable location.
If you want your investment to bring about more value, you should acquire a home in one of the upcoming neighborhoods. The main issue is that it will cost a significant sum of money to acquire a home in an already established neighborhood.
You should study the neighborhood trends to get a good idea of whether the neighborhood is worth the investment depending on the location. Focus on the crime statistics, amenities, population, school ratings, and employment figures. If you notice the area is improving gradually, it is worth it, and you can conduct further research.
4. How the Pandemic Has Affected Employment:
You should focus on the employment trends of the areas you are interested in before committing your hard-earned money. If there are more jobs in a specific locality, that is a good sign since unemployment is not attractive. With the COVID-19 pandemic disrupting the economy, the number of unemployed people has risen significantly, as per housing news. Some people lost their jobs, whereas others maintained the unemployment status. There is a lot of uncertainty in the job market, and you should consider such factors before acquiring property.
5. Where You Should Buy Property in 2021:
Investors in the real estate market usually acquire property in some of the largest markets. After the COVID-19 pandemic is contained, there is a likelihood the market would shift away from the city centers to the rural areas and suburbs. Since most people have noticed working from home is possible, they prefer a home with more space and affordable. Such individuals are currently on the lookout for spacious homes regardless of the location, considering working from home is the norm currently.
The Bottom Line:
Despite being ready to invest in the real estate sector, factors such as timing matter. The real estate sector guarantees significant profit margins; however, you should take time, study the market, and understand the best time to make an acquisition, and stand a better chance of making more money in profit margins.