Desert Luxury Realty
The tide is certainly turning for the housing market, and real estate investors are emerging out of the woodworks to snap up good buys and turn them over for huge profits in the coming months. For savvy real estate investors looking to the future for opportunities, check out these important, emerging trends in the housing sector.
Foreclosed and Distressed Properties
Foreclosures continue to inhibit a full housing recovery. However, distressed properties entering the market in droves at less than market value are quick buys for investors. With growing demand, these properties can turn a quick profit. Real estate investors can catch these homes in short sales and foreclosure auctions. As a result, investor confidence has soared 75 percent, indicating a hot seller’s market.
Rising Demand
The fallout of the housing crisis has witnessed the lowest occupancy rates and fewest housing starts seen in many decades. Recently, however,
demand for new homes and second homes have dramatically jumped over 13 percent year-over-year. With rising demand, homes are on the market for lesser time. As market inventory shrinks, demand for new homes will increase in turn. This growth in demand is particularly comforting, not only to real estate investors, but to those in the home construction industry, too.
Foreclosures to Decline
This past year the rate of foreclosures decreased 19 percent. While there are still over a million underwater homes, the rate of new foreclosures is diminishing. Eventually, the number of foreclosures, and therefore extremely inexpensive properties for investors, will decrease. Now is the time to buy up properties sold due to foreclosure.
Boomers Retiring
70 million Baby Boomers will soon be retiring. As this huge group of consumers retires, smart investors will transform real estate to suit Baby Boomers’ tastes and preferences. With extra cash in the pocket and more time to spend on home improvement tasks, Baby Boomers may become, yet again, the largest spending group in the housing market.
Low Mortgage Rates to Continue
A recent UCLA Mortgage Rate Forecast predicts mortgage rates to remain at record low levels for another two years. The forecast shows interest rates hovering around 4 percent until mid-2014, and then jumping up to 7 percent by the end of 2016.
Online Retail
Online retail outlets are expected to explode, reaching $250 billion by 2014. This will have a significant impact on the uses and needs of commercial real estate. Savvy investors will watch this market closely over the next two years to determine the role of physical space in the online market and attract online retailers to commercial spaces.
Capital Gains Tax Increases
By the end of 2012,
it is very likely that capital gains taxes will increase from the current 15 percent to as much as 24 percent. For property investors, that tax increase could mean a big chunk of change.
