Those investing in real estate are faced with the rising risk of recession as a short-term problem, but there is also a long-term concern that the economy will face growth that moves at a snail’s pace. Even in the midst of these anxieties, investors like Aubrey Ferrao and others from around the world, are still looking into U.S. real estate as the place to invest their capital.
The Expected Growth
The experts are forecasting that the next five to ten years will bring much slower growth than what has been experienced over the last five years. There are projections for 2% growth, but this number is expected to remain stable. The industry relies on economic conditions for growth, and any projections of an economic downturn put a damper on the industry’s growth. However, the real estate market doesn’t dissolve completely in these conditions. Growth will be softer and will adapt to the changes in the economy. These threats don’t deter investors in key locations around the country, as evidence in the growth around Gulf Bay and Aubrey Ferrao property developments. Foreign investors are still seeing the potential in U.S. markets, as there are few other options that signal a strong yield regardless of the economic conditions. For these investors, the capital will be available and making a purchase now can pave the wave for a future of sustainable growth. Downturns always garner some excitement for real estate investors, as historically, a downturn offers affordable opportunities to investors in an asset that will only appreciate over time.
The Tight Competition
When it comes to buying and selling real estate, just about every agent will tell you that it all comes down to location. A property is only worth what the surrounding neighborhood or community supports. For that reason, making an investment into a property may have some steep competition. Currently, the top markets for real estate investors are favoring the Southeast for the best places to buy. Austin, TX has been ranked the top city in the U.S. for investing, but others that crept toward the top of the list were Raleigh, Charlotte, Nashville, and Boston. The difference between these markets is a new trend that real estate specialists have termed “hipsturbia.” There is a new generation of buyers looking for a spot where they can live, work, and play all in the same community. Developers are looking into making this dream a reality, where walkability and the town square experience are the highlights of the community. People want more than just a home. They want an entire community experience, especially when they are raising kids. The suburbs have become highly desirable, but these are now being re-defined in light hipsturbia. Close proximity to a thriving metropolis, but with the safety and small-town feel of a classy suburb.
The Financial Concern
In spite of the efforts being made, affordable housing solutions are still unattainable for millions of households. The prices of homes across the country continue to escalate, further compounding the housing problem. The population that is able to afford a typical home keeps shrinking, as the size of the average home increases. This is a trend that has been going on for decades, which has created pressure to find alternative home solutions. This has given rise to the modular, factory-built housing movement. It provides lower-priced options for consumers, given the controlled labor costs and the efficient assembly process.
The consumers are the ones who have a vested interest in the real estate market, as affordable housing is the priority, However, real estate investors can take advantage of these needs and create a real estate market that works for all parties.