With low mortgage rates, rising inventory in new construction, and a predicted increase in foreclosed properties, buyers can literally pick and choose properties in any price range. However, the 2015 real estate market is little different from the real estate market of 2009 to 2014.
Real estate professional Jeff Adams recommends you pay attention to these factors before you step into the investment game.
More Buyers and Cheaper Mortgages
One of the best aspects of the current US real estate market is the low mortgage rate. At present, the mortgage rate is currently just under 4% and this rate is the lowest it has ever been for several years. As the economy improves, this rate could rise and this will then put pressure on the mortgage market. If rates increase to 5% or more, it could level out the real estate market and decrease investment.
To encourage new buyers, lenders like Fannie Mae and Freddie Mac have introduced lending programs that require only about 3% down payments. This will increase the number of people who will then decide to buy homes. Experts like Jeff Adams #1 Real Estate Trainer, state that this is a great time for first-time buyers or investors to step into the market and find affordable homes for purchase.
Smaller Cities Are Better Investments
Most real estate investors prefer cosmopolitan cities like Dallas, Houston, and New York for investment. These cities run 24-7 and rental properties are in demand. However, the focus is now shifting to smaller satellite cities located close to these large towns. Local authorities are now developing these satellite cities with better infrastructure, retail establishments, and housing to encourage the relocation of large businesses.
As land and property values flare in large cities, more and more businesses will start to move out into smaller satellite cities resulting in a rise in local jobs. Cities that are already facing this situation include Oakland located near San Francisco; Madison, Wisconsin; Fredrick, Maryland; Lakewood, Colorado, and Mobile, Alabama.
All of these cities are all turning out to be great cities to invest in due to increasing jobs, flourishing local economies and proximity to premier cities.
Commercial Properties Are In Demand
Due to a steadily improving economy, real estate investment has picked up in the commercial sector. Changing business models, increasing local manufacturing, economic and demographic growth, etc. have all resulted in a tremendous interest in commercial properties. Large investors have started looking into commercial properties and sales have increased substantially. In fact, real estate pundits recommend investing in commercial properties in small cities to make the most profits.
As you can see, the real estate market has changed dramatically since 2009. With changing demographics, investors are looking at cities that combine office, retail, and residential areas with transit, walkability, and jobs.
Of course, secondary investments in short sales and foreclosed properties are also possible but inventory in these areas is building very slowly. Adams recommends that you take the time to attend as many local real estate seminars and training sessions as possible before you step into the real estate market.
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