What Real Estate Market Trends to Look for Before Making an Investment

Whether you’re a first time real estate investor or have been in the game for a while, there’s something you should know. Real estate market trends are important.

The state of the current housing market is key when it comes to investing in real estate properties. In real estate investing, real estate market trends could really have an impact on your decision making. How? Well making money in real estate isn’t a straight forward rule book type of thing. The housing market is fast-paced and is always changing. It could change for the better or for the worse. It all depends on how these changes in real estate market trends are affecting your investment choices. Even your local housing market is constantly evolving.

Real estate investors need to be prepared to change with the market. Buying an investment property and making the best investment means knowing what to look for. So this blog is going to cover the real estate market trends you should keep an eye out for.

Economic Condition

Before we get into the specifics of market trends, let’s talk about what the optimal economic condition is for real estate investors. So far, according to economic and real estate experts, the current real estate market is a seller’s market. This is due to the continuous shortage of inventory and strong demand for real estate property in the market. What does this mean for you as someone considering an investment in the market? Property price is going to go up in response to high demand and sellers are going to have the upper hand. This doesn’t mean you shouldn’t consider buying an investment property. It just means you’re going to have to know where look to purchase property. Follow the market trends carefully and you can still expect a strong return on investment.

Related: How to Buy An Investment Property in a Seller’s Market

Market Trends

Knowing what type of market you’re in can help you make sense of these market trends. So here’s what to expect from this seller’s market as a buyer:

Increase in prices

The prices for real estate property have been in a constant state of growth for two years now. Property price was initially forecasted to decrease last year,2017, but didn’t. They continued to rise and this market trend remained. The same is apparent so far in 2018. High property price doesn’t stop these real estate properties from being sold, however. Because, like we mentioned, in a seller’s market there is high demand for property. For a buyer, this means you need to consider financing options. Financing investment properties can be a different case for each property depending on its features. Having your finances in order will give you a higher chance of securing a buy against competitors.

FASTER SALES

We’ve already covered how high demand is for real estate properties. Data shows that property is selling 8% faster than last year. However, very recently mortgage rates have increased a whole percentage point from 4% in September of 2017 to 5% in May of 2018. This surge is expected to decrease home buyer demand but we have yet to see the effects. If you’re investing in real estate this year, you might need to reconsider your priorities. You might need to sacrifice some wants to keep up with real estate market trends. Know exactly what you want so you can beat other buyers and get the property you want. You can visit Mashvisor and look up any real estate property in your desired area matching your requirements. To learn more about how we will help you make faster and smarter real estate investment decisions, click here

LOCATION

The real estate market trends affect the overall country whether you’re buying or selling. However, you can expect a higher chance of purchasing property in locations where these real estate market trends are at their peak. Recent data shows that highest sales have been achieved on the west coast. The state of California actually has accounted for the most locations containing most listing views and shortest time on the market. As of February 2018, San Francisco has been number one. Conduct a comparative market analysis of different real estate properties to find out which option is best for you.

Related: Traditional Rentals: Where to Invest in The California Housing Market 2018

SEASONAL TRENDS

Any real estate market analysis will tell you the same thing about the seasonality of real estate market trends in the housing market. Summer is always the hottest season for real estate investing. It’s the time of year when most people are actively participating in the housing market. Buyers investing in the summer need to know that everyone else participating in the housing market is well aware of these real estate market trends. You must be prepared to deal with sellers who know there is high demand this summer season. Again, being financially prepared is always a good way to secure buying an investment.

RENTAL MARKET TRENDS

As of 2018, rent demand is actually slowing down in most areas of the United States. According to Forbes, single-family rentals are facing the most decrease in rental demand. Real estate market trends showing a decrease in rental demand has led occupancy rates to fall. If you’re planning on making money in real estate from a rental property investment you need to consider a couple of things. If you’re going to take on the role of landlord you need to come up with creative ways to attract tenants. You want the right type of tenants as well. Real estate market trends suggest millennials and the ‘baby boomers’ will probably be the highest demographic looking to rent a property.  So if you’re a real estate investor depending on rental income keep that in mind.

Related: How to Succeed as a Real Estate Investor With Long Term Rentals

Bottom Line

Any real estate investor should always look out for the real estate market trends of the current housing market. Knowing how these trends will impact your investment choices can make all the difference. Always be on the lookout for any change in property prices and buyer demand in the housing market. Remember the housing market is ever-changing and fast-paced; it won’t be waiting on anyone. It’s up to you to know where and what to look for in the real estate market. Don’t forget to check out Mashvisor. To learn more about our product, click here.

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