The housing shortage created a seller’s market in 2019, but experts say a major shift is coming in 2020. Start evaluating options for Arizona Rehab Loans again—your buying power will go farther.
Housing stock throughout the country hit record lows in 2019. The trend was largely brought about by favorable interest rates, which gave first-time buyers the confidence they needed to take the leap. Millennials, in particular, began entering the market in masse. Much of the generation watched their parents struggle through the recession, as well as the corresponding job and home losses. This, paired with high student loan debt, made them wary of purchasing in the past, but market conditions helped them overcome their concerns and created a massive surge in entry-level single-family home sales.
According to CNBC, supply dwindled to less than four months of stock, with certain areas being harder hit than others. Six months of stock indicates a healthy and balanced market. Although changes were seen across the board, it’s most noticeable in the $100,000 to $250,000 bracket. National vacancy rates are all the way down to 6.8%, representing a 7.1% drop in just a year. Ultimately, the diminished supply also increased housing costs. Buyers have seen a considerable uptick. Renters have seen a 4% in the past year.
The pivot to a seller’s market made it harder to get good deals, meaning those leveraging Arizona Rehab Loans for their fix-and-flips needed to find novel ways to stay ahead of the crowd as competition for the best prospects grew. Although many successfully stayed within the fix-and-flip, by leveraging connections and thinking creatively, others switched to fix-and-hold to take advantage of increasing rent rates. Some switched to new construction to meet demand as well.
Of course, what goes up must come down. Information recently published by Investopedia indicates a recession may be coming in 2020. Based on a mix of research and surveys of homeowner sentiment, it’s may arrive as early as the first quarter too. Experts say the very thing that’s currently rising market values—booming demand and short supply—will also contribute to a cyclical downturn in the economy. When that happens, demand will slump and values will fall, making it easier to grab better deals and work Arizona Rehab Loans again.
Regardless of predictions, nobody really knows what will happen with the market, and for every source that says a downturn is imminent, there’s another that says it will hold steady for the foreseeable future or that the trend will continue. Whether your specialty is new constructions or fix-and-flips or fix-and-holds with Arizona Rehab Loans, it’s possible to continue doing what you do best in any market and still turn a profit. Of course, that doesn’t mean the signs should be ignored entirely, but rather monitored for shifts so strategy can be adjusted.
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About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.