The coronavirus outbreak has definitely shaken our lives. Everything is going through a temporary or even a permanent change. Regardless, the future does seem a lot less certain than we would like it to be. Knowing this, Chicago rental property owners wonder how COVID-19 will impact the real estate market.
Based on current economic indicators, it’s safe to say that changes are on the way. However, these changes won’t all be negative. 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 for you if you are ready to buy another rental property but may slow the appreciation of your property values on existing properties. Seeing that home prices are continuing to grow means that the real estate market continues to be resilient during these extraordinary circumstances.
Property owners are afraid that a housing market crash similar to the one in 2008 will happen. They are afraid the high unemployment rates right now will lead to foreclosures as people stop paying their mortgages. But most experts say that another real estate market crash does not appear to become. Instead, most agree that property equity is likely to decrease as buyers nationwide continue to show interest in both existing and new homes.
The multiple reductions in the mortgage interest rate are yet an additional unexpected change this year. To prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. These low rates offer a lot of opportunities for the Chicago rental property owner. These can range from refinancing existing loans to lowering your monthly payment to borrowing for your next property at very favorable rates. Understandably, the low rates have created a rush for most people to secure financing, hence lenders have become overwhelmed by demand or are tightening their lending criteria. High demand also brings about longer turnaround times, from inspections to appraisals. Patience is a virtue, so they say. It couldn’t be truer! As long as you already have a lender on board, you can still take advantage of the current rates.
It is important to do this because even when experts do not expect a housing market crash, another recession is almost certain. Although the stimulus funds given by the federal government may have delayed the worst of it, such a fix is still temporary. As conditions worsen and the extent of the coronavirus outbreak is still unknown, experts aren’t able to predict the impact of COVID-19 on the real estate market next year. 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.
These new tools are the new normal of the real estate market. These will make real estate investing more efficient and full of energy. Chicago 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.
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