Today’s Market in Real Estate
In real estate market, it is said that timing is everything. The timing of a sale or purchase can increase the opportunity for a much profitable real estate investment. However, you often do not realize the chance until the time has passed. Today’s market in real estate may be a time of great opportunities.
With the exception of single family housing starts and several factors more particular to commercial real estate, majority of the indicators specific to residential are said to be better than their twenty-year averages in year 2016.
Expectations for the current home prices are more optimistic compared to the forecast in real estate market months ago. In year 2015, the home prices grew on average by 5.7%. This 2016, it is expected to have 5.0% increase.
Since year 2010, the capitalization or cap rate has been minimizing and predicted to hold steady at 5.1% in year 2016, then rise to 5.5% by 2018 because of increased borrowing costs.
Apartment Vacancy Rates
Over the past several years, the sector of apartments has fared well when it comes to vacancy rates, which experience a decline in the vacant units from 7.1% in year 2009 to 4.7% in year 2015. The forecast in today’s market in real estate predicts the apartment vacancy rates to increase on a small scale from year 2016-2018, when this is expected to reach 5.4%, which is a rate that’s still stronger compared to the twenty year average.
Single Family Housing Starts
The formation of single family housing is expected to rise from around 715,000-800,000 units in year 2016, which is a trend that will continue to increase in 2017 and 2018.
Growth of Apartment Rental Rates
The rates for apartment rental that hit a near ten year high in year 2014 at 5.3% and this is expected to progress downward as they did in year 2015 to 4.3%, hitting 3.6% in year 2016, and a 3.0% in 2017 and 2.4% by 2018.
What Experts Say about Today’s Market in Real Estate?
For many experts, the latest report about the real estate market was just right. About twenty-six percent of people voted that the forecast was very optimistic with under ten percent, which indicates that it wasn’t optimistic enough. Many are optimistic as everything is balanced. The construction is disciplined, so even though there are some cases that could lead to recession, analysts believe that the real estate market will tolerate well.
Should You Purchase Today?
If you’re motivated to purchase, there are 2 reasons that makes this year a good time. Firstly, you need some options to pick from. The second is the negative news caused interest rates to slightly dip. But, the interest rates might not stay down long. The decision is yours. You can buy a property now or later. Just make sure to keep right timing in mind as this can play a huge role in getting the best value of what you have spent.