Advantages of an Unstable Real Estate Market

Some of you who were about to purchase or sell real estate are frozen in place. You may have experienced or anticipated success by using a “proven” business plan but are hesitant to test it in today’s fluctuating real estate market.

Successful entrepreneurs use a more opportunistic philosophy to complement their business models.  Unstable markets provide you with opportunities to apply that philosophy.  It presents advantages for both buyers and sellers when they act in a timely manner with good knowledge and guidance.  With good information obtained thorough a trusted financial advisor and real estate professional, you can be successful.  After visiting the bullet points below, you may be able to envision your own opportunities.

As a Real Estate Professional with more than twenty years’ experience, let me share some observations to consider.

• Don’t let dollars and liquid assets remain idle. The US Dollar continues to depreciate due to rising inflation, reported to be at 8.3%. When selling, use the proceeds of the sale for a replacement property.  Consult with your tax consultant about the advantage of a 1031 exchange procedure to save on taxes and financial advisor about financing to leverage up your investment.

• Despite recent interest rate increases, they are still somewhat modest. Remember, your payments in a long-term mortgage remain unchanged as the dollar depreciates and the value of your real estate continues to increase as do rental rates.

• Real estate values fluctuate and have appreciated at an average of 4% to 5% per year since the1980s, even recovering on that course quickly after 2008.

• We were recently seeing a 10 yr. shortage of housing.  While we pray for all the victims impacted by Ian, we know the devastation left in its aftermath is going to add more stress on construction resources, materials, and labor, for building new and replacement residential and commercial buildings.  Such demand will drive prices and rental rates higher in the coming years. Zillow reports home values rose 19.5% in 2021 and are predicting it to rise an additional 11% in 2022.

Perhaps you can advantage yourself among those observations.  There is rarely a bad time to either buy or sell real estate.  Today is no exception, evidenced by the behavior of many large investment institutions:

• Large investment institutions are presently investing heavily in Real Estate.  A Blackrock sponsored REIT has a heavy focus on single family rental homes.
• PricewaterhouseCooper lists Florida among the top eight markets to watch as being affordable with a warm climate, exceptional jobs growth and market growth potential.
• The National Association of Realtors forecasts the 2022 vacancy rate to tighten to 4.8% from 5.1% in 2021.

Real Estate is our business, so ask us to help you map out your opportunities for success in concurrence with the advice of reliable financial advisors.   For a consultation, contact me direct at june@questrealestatenow.com or (850)559-2178.