In April and May of 2020, the housing market crashed to its lowest levels since the crisis that began in 2007. With the COVID-19 pandemic just beginning, no one wanted to sell their home. And, not many people were willing to buy.
As the coronavirus pandemic is slowly coming to a close, many people are left wondering what’s going to happen to the housing market post-pandemic. Will people start buying property instantaneously? Or, will the pandemic have caused a rippling effect for years to come?
To explore property investment in a post-pandemic world, keep reading. We’re going to talk about what experts are predicting for the next few years and how you should respond to these market changes.
Experts Prepare for Another Housing Market Shock
Given the changes in the market that happened during the coronavirus pandemic, experts are getting ready to brace themselves for future changes. Many people have argued that we weren’t ready for the shock of the pandemic. Thus, we need to be prepared for the next eventual drop in the market.
Given that we’re in a time of low interest rates, there are a few things we need to consider:
- The dynamics of the local markets
- The current market liquidity
- Population characteristics that could be affecting the current market habits
- The amount of debt tied into the real estate market
In response to the COVID-19 economic fallout, local and national measures went into place with the hopes of reeling in future problems. Banks reduced interest rates, governments induced lockdowns, and everything seemed to completely stop for the greater part of 2020.
In order to get money moving again, governments are putting out fiscal support while banks are rolling out monetary support. Every entity is working together to get back to the normalcy that we had prior to the pandemic.
Establishing the Current Market
Unfortunately, the influence of the pandemic will be here for a while. We are still seeing shockwaves through financial markets and economies. And, that’s going to be happening for a while.
However, some measures have caused a great boost of optimism in the housing market. Some places are reopening to the public. Trade is coming back.
Things are slowly returning to normal.
As economic activity rises, the housing market is doing better and better. Although, we’re nowhere near pre-pandemic levels of housing market activity.
In fact, some experts are cautious about the rises we’re seeing in the housing market right now. They’re waiting for the next wave of infections from the mutant strain. Even without a second pulse of the pandemic, we’re still waiting on the United States’ GDP to rise back to normal.
Getting back to economic norms is going to take a while. But, governmental policies seek to cut this time in half.
This all brings us to the one thing holding the housing market back: hesitancy. The changes that came with the pandemic have everyone confused and nervous about the economy to come. This means that fewer people are buying and selling, causing a slow-growing housing market.
Navigating these feelings is the most difficult part of trying to predict the post-pandemic housing market. In order to keep the market moving, we have to predict when people are going to be ready to jump back into buying and selling again.
The Lasting Impact of the Coronavirus Pandemic
Some of the shocks that the housing market experienced during the pandemic may be here to stay, at least for now.
Experts expect that interest rates are going to remain low for a few years after the pandemic. With that, governments across the world are going to be operating at higher levels of debt that are going to become the new normal. In the end, we’re either going to see lower government spending or an increase in taxes.
Property Investment in the Post-Pandemic World
Given all of these changes at the market and governmental levels, property investment is going to change. Buying property is going to look different than it once did. But, it’s still a stable form of investment.
And, there are a few kinds of properties that investors are looking at while the markets return to normal:
- Market-resilient options
- Geographically-resilient options
- Government-backed options
As you can see, all of these property choices are made to survive market dips. So, if there are any future problems in the housing market, your properties are going to stay valuable and safe during that time.
So, if you’re looking to continue buying properties even as the market is down, these are the three kinds of properties to focus on.
1. Market-Resilient Options
Market-resilient options are also known as safe-haven options for property ownership. These are the kinds of properties that produce income no matter what the market is looking like.
For example, you may want to consider office buildings or apartment buildings near big cities. These are the kinds of properties that will stay popular even when the market dips.
2. Geographically-Resilient Options
These properties are located in innovative, research centers across the world. Because of their resources, these areas are rich in wealth.
So, the housing market is less likely to hit these areas. For example, you may want to consider big cities or technical hubs.
3. Government-Backed Options
It’s always safe to choose a property that the government backs with its own funding. The best choice for today’s government funding is green buildings. These are buildings that are made to respect the Earth and reduce the human effect on the Earth.
You’ll be able to get funding for these kinds of properties outside of renters or buyers.
Get Involved in Property Investment
As of right now, property investment in real estate is back on. We’re getting back into the normal investing process slowly, but it’s a great time to take advantage of a market that isn’t too saturated.
If you’d like a hand in property investment during this uncertain time, you can depend on our team at Memphis Investment Properties. We can help you through the investing process to ensure that you’re prepared for buying real estate in the post-pandemic world.
Get started today!