The outbreak of the coronavirus has caused a lot of changes in our life. These changes may be temporary, or they may be here to stay for a while. There is less certainty about the future. With all this, Dartmouth rental property owners are starting to wonder how COVID-19 will change the real estate market and how those changes will affect them.
Based on current economic indicators, one can say that changes are on the way. We don’t necessarily have to be afraid of change. Market data shows that home prices are still rising, if very slowly. Growth in the first part of 2020 was less than 1% but has been improving since. Slower home price growth may be good news if you are ready to buy another rental property but may slow the appreciation of your property values on existing properties. Still, you can’t discount the fact that home prices continue to grow as the real estate market proves to be resilient in extraordinary times.
It is important to take note of this because many property owners fear another housing market crash -like the one in 2008- will happen. Current high unemployment rates seem to foreshadow many foreclosures as people stop paying their mortgages. But most experts do not see another real estate market crash on the horizon. On the other hand, most experts agree that property equity is likely to decrease as buyers continue to show interest in existing and new homes.
Another unexpected change brought about by the current situation is the multiple reductions in mortgage interest rates. To prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. For Dartmouth rental property owners, low rates present a host of opportunities. These can range from refinancing existing loans to lowering your monthly payment to borrowing for your next property at very favorable rates. Since these low rates have more people wanting to secure financing, lenders are overwhelmed by the demand or are tightening their lending criteria. High demand also brings about longer turnaround times, from inspections to appraisals. As long as you are patient and have a lender on board, you could still take advantage of current rates.
You should act now because even if experts don’t see a housing market crash happening soon, another recession is almost certain. Stimulus funds from the federal government may have delayed the worst, but it is still just a temporary fix. While the coronavirus outbreak’s reach is still unknown, and if conditions worsen, no one can really tell what COVID-19’s impact on the real estate market next year will be. Many real estate professionals are adapting to pandemic conditions through innovations in digital technologies. With virtual sales, online property tours, and Zoom consultations in their arsenal, real estate brokers, mortgage lenders, and property managers are using new tools to keep the market moving forward.
The new normal calls for these new tools for the real estate market. These will result in improved efficiency & increased energy in real estate investing. Dartmouth rental property investors have to be on the alert for opportunities to streamline and modernize both your investing and your property management process. Contact us today for help on how to do so, so you successfully make it through whatever the future may bring.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
