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How COVID-19 is Changing the Real Estate Market

McKinney Property Manager Wearing a Mask to Protect Against COVID19As the world contends with the coronavirus outbreak, numerous aspects of life have shifted. Quite a lot of these changes may be temporary, yet others may last quite a while. The future seems less certain than it used to be. That is why it’s reasonable for McKinney rental property owners to wonder how COVID-19 is changing the real estate market and how those changes may affect you.

In reference to current economic indicators, it’s safe to say that changes are on the way. Having said that, it does not really mean that all of the changes will be bad ones. Market data shows that home prices are still rising if just very slowly. Growth in the first part of 2020 was less than 1%, however, that has improved since then. Slower home price growth may actually be good news for you if you are apt to buy another rental property but, as a matter of fact, it may slow the appreciation of your property values on existing properties. At any rate, the fact that home prices continue to grow is a nice sign that the real estate market continues to be resilient in the face of extraordinary circumstances.

This is primarily crucial for the reason that most property owners are watchful of another housing market crash much like the one we experienced in 2008 – and for a good reason. With such high unemployment rates at this point, it appears it’s hard to avoid another big wave of foreclosures as people stop paying their mortgages. Yet, most experts do not see another real estate market crash coming. In contrast, most agree that property equity has an inclination towards decrease as buyers nationwide continue to show interest in both existing and new homes.

A particular unexpected change this year has been multiple reductions in mortgage interest rates. Aiming to prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. As a McKinney rental property owner, such low rates present several opportunities. These can range from refinancing existing loans to lowering your monthly payment to borrowing for your next property at very favorable rates. It goes without saying, the low rates have led to something of a mad dash to secure financing, a lot of lenders are either overwhelmed by demand or tightening their lending criteria – or both. High demand has furthermore created longer turnaround times for most parts of the purchase process, from inspections to appraisals. Although providing you are patient and have a lender on board, you should certainly be able to take advantage of current rates.

Doing it this way is particularly relevant because while a housing market crash may not be expected, experts predict that another recession is almost certain. While stimulus funds from the federal government have helped delay the worst of it, such a fix is temporary at best. As conditions worsen, and with the trajectory of the coronavirus outbreak is still unknown, industry experts don’t know how COVID-19 will affect the real estate market next year. Several real estate professionals are adapting to pandemic conditions by using digital technologies in new and resourceful or creative ways. With virtual sales, online property tours, and Zoom consultations in their arsenal, real estate brokers, mortgage lenders, and property managers are making use of new tools to keep the market moving forward.

It can surely be that these new tools become the new normal of the real estate market, causing further efficiency, and energy in the business of real estate investing. For McKinney rental property investors, it’s critical to stay vigilant for opportunities to streamline and modernize both your investing and your property management process. Contact us today if you desire help on how to do so, so you successfully make it through whatever the future may bring.

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