If you own a home or are interested in buying one, you are aware of the significant downturn in residential real estate in the United States. Sales figures are falling to their lowest rates since 2020, but interest rates continue to rise to around 6.5%. This scenario does not mean that investors should switch to another option considered less volatile.
Take real estate investment trusts (REIT), for example. REITs are not just a platform for investing in residential real estate, offering properties such as retail space, large shopping malls, hotels, apartment buildings, offices and hospitals. And while house prices continue to be high, other real estate categories aren’t as overvalued, potentially shielding investors from the risk of steep price declines.
Investors have not abandoned the residential market, using financing options to take advantage of low housing stock and turning properties into rentals. This strategy contributes to the high house prices observed over the past two years.
According to real estate intelligence data firm CoreLogic, the share of investors in single-family homes sold in the first quarter of 2022 reached 28%, 11% from the same period in 2021. Its data also showed that investors owning a thousand or more homes bought 3% of homes in 2021 and so far in 2022, compared to 1% in previous years.
Major real estate players such as Redfin Corp. and Offerpad Solutions Inc. He also bought houses on a large scale. Zillow Group Inc. fell on their noses in this business, alienating real estate agents who stopped advertising with a business they thought was in competition with them. “Scarcity of supply is also a plus for owners,” said Redfin economist Sheharyar Bokhari. “A lot of people who can’t find a house to buy are forced to rent instead.”
Real estate billionaire, author and sales trainer Grant Cardon He sees an opportunity in the current market.
“I believe we are entering the BEST opportunity in the housing market since 2008. With the Fed raising interest rates, it has pushed home buyers out, which means prices will pull back. If you are a end user who is looking to enter the housing market, now is a great time to buy a home that is cheaper than it would have been at the start of the year.You should be looking for people who, at the end of last year or early this year, were hoping for a quick jump and had an adjustable loan, waking up to no market in which to sell and repay their doubling loan,” he said. “Also look for institutions that have already written off a large portion of their portfolios and will bring a lot of products/stocks to market in the last quarter of this year.
Cardone, the former Undercover billionaire on the Discovery Network and CEO or partner of seven private companies, signaled his belief that investors don’t need to shy away from real estate investing, saying, “I’m an aggressive buyer until the end of the year and the following year of income-producing real estate.
Of course, not everyone has the cash to buy discount properties. A growing number of investors are turning to more passive options like Cardone’s Managed Real Estate Funds via Capital Cardonawhich has already raised approximately $1 billion from nearly 12,000 accredited and non-accredited investors and has a portfolio of approximately 12,000 multi-family units and over 235,000 square feet of commercial office space.
Some investors even enter the market with as little as $100 through the Jeff Bezos-backed real estate investment platform which sells shares of single-family rentals. The company has already financed 203 properties worth over $75 million.
Learn more about Benzinga real estate
Picture by leolintang on Shutterstock.com
Don’t miss real-time alerts on your actions – join BenzingaPro free! Try the tool that will help you invest smarter, faster and better.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
0 Comments