Financial downturn undoubtedly took a concerning toll on global financial markets during the second half of 2015. With international tensions running high and trends reversing, many are battening down the hatches in preparation for the bearish markets to come in 2016.
In America, ultimately we are very concerned with maintaining a healthy real estate market and avoiding the critical ramifications that resulted from the 2008 subprime mortgage meltdown. Despite outside factors and less than favorable world economic conditions, both savvy investors and homeowners alike have still been able to stay profitable by tapping into flourishing markets.
Tools of the Trade
Some of the key issues associated with the 2008 meltdown were the lack of tools readily available and a substantial lack of conducted due diligence. Real estate investing without sufficient analysis and necessary data is like trying to land a 747 while blindfolded. It’s no wonder the American economy went down like a lead balloon considering so much had been anchored to an unacceptably high number of subprime loans.
Today, there are tons of user-friendly tools available to buyers and sellers alike, and you have access to more real estate information and data than was ever accessible in the past. That’s why you should make utilizing the technical revolution in real estate (say, using the tools provided by Home Bay to sell your own home) a goal for the years to come.
Real estate is very special when considered as an investment vehicle. While consumers might stop buying certain goods or services due to their eventual obsolescence, people will always be in need of attractive housing. Diversifying your portfolio to include in-demand properties is a great way to see higher returns and hedge against riskier investment ventures.
Certainly, plenty of neighborhoods are unfit candidates for either renting or flipping, but if you look at the bigger picture, the ever increasing population rate and subsequent demand for housing can only mean one thing for the real estate market. Furthermore, in mid-December 2015 the Federal Reserve rate hike marked the Fed departing from a near 0% interest recovery mode.
As interest rates begin to climb, potential buyers will have even more incentive to get off the fence and into the market while rates are still reasonable. Additionally, with certain rental markets hotter than ever, now is a great time to benefit from the steady stream of income rental properties can provide.
Situational Awareness in 2016
With the constant amount of change in each market, it’s necessary to stay on top of and make sense of current trends and the latest data. The American and global economy will certainly be tested in the year ahead, but as a savvy and proactive real estate investor you can make the most out of the unique opportunities 2016 has to offer.