As the entire world deals with the coronavirus outbreak, everyone’s lives have been affected. Changes abound –temporary or otherwise. There is less certainty about the future. Knowing this, Bar Harbor rental property owners wonder how COVID-19 will impact the real estate market.
Current economic indicators seem to say that changes are on the way. But remember, not all changes are bad. Market data shows that home prices are still rising, if very slowly. Although growth in the first part of 2020 was less than 1% it has improved since then. Slower home price growth may be good news if you are ready to buy another rental property but may slow the appreciation of your property values on existing properties. The fact that home prices continue to grow is a good indicator that the real estate market has resiliency in these extraordinary circumstances.
Property owners certainly don’t want another housing market crash like the one in 2008. Today’s high unemployment rates might lead to foreclosures as people stop paying their mortgages. But a real estate market crash does not seem like a big possibility. In fact, most agree that property equity is likely to decrease as buyers nationwide continue to show interest in both existing and new homes.
Another unexpected change brought about by the current situation is the multiple reductions in mortgage interest rates. To prevent a housing market crash, the Federal Reserve has slashed mortgage interest rates to historic lows. These low rates give Bar Harbor rental property owners many opportunities. These can range from refinancing existing loans to lowering your monthly payment to borrowing for your next property at very favorable rates. Since these low rates have more people wanting to secure financing, lenders are overwhelmed by the demand or are tightening their lending criteria. High demand also brings about longer turnaround times, from inspections to appraisals. But if you are patient and have a lender on board, you could still enjoy the current rates.
Doing this is important because although experts don’t see a housing market crash happening, another recession is almost certain. The stimulus funds from the federal government are just a temporary solution. While the coronavirus outbreak’s reach is still unknown, and if conditions worsen, no one can really tell what COVID-19’s impact on the real estate market next year will be. Many real estate professionals are adapting to pandemic conditions by innovating with 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.
The new normal calls for these new tools for the real estate market. These will result in improved efficiency & increased energy in real estate investing. As Bar Harbor rental property investors, you must scout for opportunities to streamline and modernize both your investing and your property management process. Contact us today for help on how to do so, that way you can successfully make it through whatever the future may bring.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
