The Current Market Trends in 2019
Every year brings something different when it comes to market trends, especially in real estate. There have been several years of low-interest rates and substantial growth in property values, ever since the 2008 recession ended.
However, as it’s always the case, with such constant growth and optimism, many investors fear that there will be some unfavorable changes, most notably sometimes later in 2019. Some are even saying that a new recession is near.
We’ve analyzed what the experts are saying, and you can read it all summarized in this article.
The Real Estate Growth Will Slow
Both sides – the supply and demand – are softening which means that will be a lower growth than usual. It is a good thing, despite what some might think.
The real estate market has been growing for too long now, and there should be a decrease in this growth. Anything that expands a lot for too long is not good, and there is the chance it will implode.
Significant Differences Between the National and Local Levels
Talking about growth, most experts advise investors to look at their local market which can often be entirely different from the national one. So, if the growth is slowing down on a national level, it doesn’t mean that each local area will be the same. There will always be local markets which go in a completely different direction to that of the national market.
Urban Properties Are Still Highly Valuable
Since 2010, urban rentals have increased by 32% which is more than enough to say that urban properties continue to be highly valuable across a vast number of major cities in the US.
Besides that, multifamily properties are the ones seeing the highest values. Both millennials and retirees are looking for the convenience and luxury that exists in cities which are prompting the market value to remain high or continue to go up.
Investing in Rural Areas Continues to Be Risky
Everyone looking to invest should stick to urban areas as rural ones are low on available jobs and overall security in positions. Any city above 50,000 residents is a good bet, especially the major cities across the US.
Investors Shouldn’t Count on the National Economy
We are not saying that there should be no reason for fears, but investors need to be aware of the fact that the US economy is cyclical. The average cycle is usually around five years, while the longest is ten years. We are currently at nine and a half years since the last change.
Many believe that the next downturn is nearly here, but not all think it will be catastrophic like in 2008. Whatever happens, it’s highly advisable for investors to diversify their portfolio. Californian real estate investors should consider 1031 exchange to diversify the capital into long-term properties to survive a possible downturn.
Rental Properties Are Still Highly Sought
Rental vacancy in the US is at its lowest level since the 90s. It has rent prices continuing to rise. Some areas like California see a high demand for rental properties.
As you can see, despite growing fears of the next recession, there are still areas and excellent opportunities for investment. If you want to know more about the current market trends, you may reach us at www.cbicommercial.com