As the COVID-19 pandemic continues to wind down, ingraining itself as a part of daily life, analysts are looking back on its impact on various markets. From toilet paper selling out to people hoarding hand sanitizer, the pandemic’s impact on certain industries was obvious. However, the real estate market saw something of a surprising transformation, machinating momentum in certain areas.
Let’s take a closer look at how the real estate market is acclimating to life as the economy continues its transition.
People Are Done With Nesting
The numbers are clear and a glance out the front door will verify the observation: nesting is over. As consumers regain their confidence in the market and their own willingness to go outside and shop, the economy will continue to transition and rebound. Vaccinations are overwhelmingly available and shoppers are ready to start shopping again. This includes the real estate market where formerly hesitant buyers are returning with a vengeance. Investors are also having a good time buying and fixing up property with support from firms like Hard Money Lenders AZ.
Lessons From the Last Recession
The 2008 housing crisis saw lenders and homeowners lose everything. While the COVID-fueled pandemic hurt the real estate market in certain areas, it allowed lenders to learn and prepare for the future. While a 2008 crisis is unlikely, there are ways that we can use the past to help us weather the present pandemic until it is ended.
- Consistency – Neighborhoods that featured consistent pricing across the board were more likely to perform uniformly during the housing crisis of 2008. Neighborhoods with outlier properties had more issues maintaining their price point, though this means there are open doors to investment opportunities.
- City Homes Did Well – Properties that were located closer to the core of communities in the city/suburbs fared better and were quicker to rebound from the ’08 housing crisis. As city living becomes more and more revered, expect areas like Atlanta and Denver to continue seeing growth.
- Tread Carefully – During the pandemic, certain up-and-coming neighborhoods saw their value tank more often. This was due to investors looking for the ‘next big neighborhood’. As speculation gives way to data, areas that are not on solid footing will be considered a greater risk during times of economic concern.
In the end, The Mushroom Theory sums up the situation the best. We can tell the health of a neighborhood and potential investment property by analyzing its shape, consistency, and nutrition. Mushrooms are stronger in the middle, more consistent in shape and in texture, and nutritious — unless you eat too many.
As an investor, moderation, and analytics are the keys to your success. Talk to the team at Hard Money Lenders AZ for support on your next project!
