Working With A Volatile Market
Right now in America, real estate markets are experiencing some unprecedented shifts. While some markets haven’t been as negatively impacted by the historical events of 2020 as others, there are certainly considerable trends right now.
In a July 1st report from Realtor.com, it was found that year-over-year inventory decline is at 27.4%, while large markets saw a decrease of 26.5%. This is at the national level. In terms of properties that have been newly listed, declination was 19.3%, while large markets saw a 16.2% decline.
Nationally, there was an increase of 5.1% in median listing price as of June 2020, and additional estimates showed that over last year, June’s sales were 15 days slower than the average at 72 days to sell. So what do all these numbers mean to you as a home buyer?
Well, they could mean a few different things; but what seems clear is that presently the market has tightened up. If you’re going to find a good place to live, you need to shop locally, rather than nationally. Different trends locally will have a different impact. Even though we’re amid a pandemic built around an illness caused by “COVID-19”, listing prices are increasing overall.
Smaller Communities Differ From National Trends
However, smaller local communities will have different factors influencing their price. This could mean an increase or decrease in property values. A great example would be Texas. Presently, you can find some exceptional deals on apartments through sites like this one focusing on uptown Dallas. Many millennials are heading to Dallas and buying up these units.
Beyond Dallas, though, some secondary strategies are equally attractive to the present generation. Owing to the decentralization of labor currently developing, millennials are increasingly working from home and seeking jobs that allow as much. Accordingly, they’re not residentially locked. Many can afford to pick different communities.
In a community about 100 miles from Dallas in a circle, some properties list under $100k and represent a worthwhile buy. Some properties are as cheap as $50k. Now if you’re paying $2k per month for an apartment, in two years you’ve put in $48k. You could own a house in two and a half years if you’re paying in at that rate, and be near Dallas / Fort Worth.
Many millennials are considering tiny homes, they’re also considering homes in small communities. Certain advantages develop from such a strategy. Should something inconvenient transpire in the big city, being about a hundred miles away keeps you insulated from the majority of negative effects associated with such an event.
Present Socio-Economic Impact On Different Markets
Those on lockdown in smaller communities tend to have less difficulty than those in larger communities. As a result, many millennials are moving to just those sorts of communities. Homes are drastically cheaper, and labor is decentralized through the internet. It’s a win-win for millennials and local residents.
An increase in population stimulates the local economy, keeping local businesses viable. Presently, there is an exodus from larger cities. New York City and larger metropolitan populations in California are perhaps seeing the most drastic change. NYC Millennials are on the move. Californians are heading into Colorado, Utah, Idaho, Texas, and Montana.
Will this be like the Oklahoma migration of the Great Depression? It’s hard to say, but what’s on the minds of everyone in 2020 is getting out of larger cities. Accordingly, those who stay will invariably see real estate deals develop. The larger the city, the greater the infrastructural challenge today’s economic and health crises foist on their populations.
A Closer Look At Possible Outcomes
This could indicate several outcomes: inflation or deflation have been prognosticated by several prominent economists, depending on their leanings. It’s easy to see how things could go both ways.
On the one hand, legal controls, price controls, taxation, loss of business, and quarantine could lead to many leaving the larger cities, to the extent that those cities lose a substantial economy.
Then a situation like what’s being seen in Detroit, Michigan transpires. Suddenly mansions are available for $10k. Alternatively, with bail-outs and monetary incentives from the government, it’s equally possible that inflation could be the looming specter; in which case a $10k house will be sold for $100k.
Or, there could be the recovery in stages, in which case 2020 may prove a financial aberration that doesn’t have a lasting impact on the economy, owing to negative consequences being properly counterbalanced through deft government management. Nobody knows the future, so what is being explored here is the sort of trend which will impact the market one way or another going forward.
Carefully Inform 2020 Real Estate Investment
Essentially, exceptional real estate deals may be available very soon, even as real estate in ideal communities becomes more expensive and takes longer to sell. One thing is sure: 2020’s millennial real estate market is certainly volatile, and getting your financial finger on its pulse requires some research, and maybe even consultation if you can find it.
Contributed by Mark Klein (Guest Writer)