The Virtual Investor – Is this future of US Real Estate ?

The Virtual Investor – Is this future of US Real Estate ?
We are all facing a time of economic uncertainty, builders have ceased working on sites across the US and US cities have gone into lockdown. All forms of work have virtually stopped and new stringent measures makes us adopt a more cautious approach when it comes to investment.
 
There is no denying that the current global situation is having an impact on the US housing market but the scale and size of this impact has yet to be ascertained.
 
If we take the last week of March as an indicator we can see that the number of newly-listed properties fell by 13.1% and 34% respectively when compared with the same period a year ago. This is an indication that some Sellers may be holding off on listing their properties right now afraid they may take a hit due to the current market conditions.
 
During this period we have also seen that house prices did not rise but more or less stayed level as compared to this time last year according to realtor.com there is no doubt that the current situation is disrupting the normal momentum we see in the US housing market.
 
Claims of mass unemployment and a foreclosure crisis may keep some investors on the side line but one key difference now as compared to the 2000s is the housing market stock levels, the US housing market is now not over-built.
 
Mark Fleming, Chief Economist for Title Insurance Company First American Financial Corporation has worded it very well “While housing led the recession in 2008-2009, this time it may be poised to bring us out of it,” 
 
Rising home values and stricter lending standards have also meant that homeowners are sitting on historically high amounts of home equity as compared to 2000s, that is because before this current global situation the US housing market was on a very strong footing, we do not have to make mass gains to get us back to where we were.
 
Due to the lockdown we all have more time to surf the web and dig a little deeper into areas of interest, we can now spend more time building our knowledge studying how certain markets work and listen to what other people are saying. 
 
In recent weeks we have seen a surge in online courses and activities as people try out new things. In the US we have seen many people trying their hand at buying and selling properties to make a profit in anticipation of an economic downturn, which is impacting the inventory levels.
 
There is no doubt that the housing market will not come out of this unscathed but some investors are seeing this current market condition as an opportunity, they label themselves the iBuyers.
 
iBuyers are individuals that purchase homes outright from doing their own research on the web, they are looking at the properties age, condition, and zip code some of them even use mathematical algorithms, the iBuyer predicts the home’s future value, with the hope to eventually list them on the open market or sell them for a profit.
 
While this does seem appealing especially since we all have more times on our hands we do need to take into consideration the cons of going it alone.  iBuyers have to make a profit, and to do that, they can’t offer sellers full market price for their homes. This typically means sellers get significantly less for their home than they would if they used traditional methods. iBuyers also need to cover repairs and maintenance in order to make the home marketable. These expenses can severely impact the potential to make any profit.
 
The other risk for iBuyers is being unable to resell the property quickly enough, having costs can add up, they might have ended up buying a property that is different to what they originally thought. The convenience of iBuyers is definitely intriguing. However, it seems like the overall cost of this convenience will need to come down before it becomes consumer-friendly and more mainstream to investors.
 
Our advice is to trust the experts, years of experience and a solid network of trusted suppliers lessens the likelihoods of entering stormy uncharted waters.
 
As a company we always do extensive due diligence on every property we list, we are currently pushing our suppliers to provide us with properties just below market value, to give us all a little bit of room should the market drop slightly. Our purchasing power enables us to get the best deals for our clients given the current environment, going it alone as an iBuyer is not always the right decision.
 
We are also working hard to expand our inventory of Section 8 and other assisted income properties as these are seen as a very appealing investment in this current market.
 
Like other US Real estate companies we are adjusting to the current changes, safety of our staff is paramount so we also have adapted to working at home, carrying out virtual tours, using teleconferencing platforms and working with authorities in relation to their guidelines and advice. 
 
It is the same with the Partners we work with, from the management companies to the title companies, they too have adapted to this new environment while maintaining the same level of service they have always provided.
 
We think our new inventory is better than ever, very reasonably priced properties from the top suppliers in the US.  This current situation will end one day and the market will come back strong, there is no doubt prices will rise in the future far beyond what they are today.
 
If you would like to see our latest inventory please email invest@globalinvestmenstincorproated.com

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