Real Estate Investing in a Post-COVID World

Market Insights
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11 Jan 2022
5 min read
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2020 is (finally!) in our rearview mirror but the effects of the COVID-19 pandemic are hardly over and will perhaps be longstanding.Virtually every industry has been impacted in some way and that doesn’t exclude the residential real estate market. For better or worse, the way in which people view their homes or investors search for property has shifted. So, what can investing in a post-COVID-19 world look like?

The reality is that investors – now, more than ever – will have to be cognizant of buyers’ wants and needs, as well as have a stronger understanding of the different markets drawing people to them. Investing in a post-COVID world might still feel more like a dream and less like reality, but with expectations of more people being vaccinated, it’s worth considering what the residential real estate market will look like.

Location is still king

Tech hubs are still expected to reign supreme, however the regions people are flocking to might surprise you. Burgeoning tech scenes – Sacramento, Ca. or Charlotte, NC, for example – offer proximity to major cities (Sacramento is only a two-hour drive from San Francisco and San Jose) and job opportunities without the massive price tag that accompanies the housing market in those traditional tech cities.

Following the digital trail and becoming familiar with other markets could expand your investing horizons and pad your portfolio with plenty of moneymaking opportunities that could lead to tangible long-term financial success.

Home is where the…everything is

It seems that full-time (or at least most-of-the-time)remote work has been widely embraced by many industries that can afford to not have bodies in an office. This new shift has led to a longer list of what renters and homebuyers are looking for when house hunting.

Office space, outdoor space, and proximity to town centers and community have all become key items for many people. How does that, in turn, impact the properties investors should be scouting out? For fix-and-flip investors, that could mean getting creative with how they’re re-envisioning a home’s indoor space to better accommodate the new normal.

Foreclosed properties might become less reliable

Foreclosed properties have always been a reliable option for fix-and-flip investors to venture into, however, with widespread mortgage forbearance and foreclosure moratoria across the country, the option to delve into foreclosed properties was virtually nonexistent.

In fact, foreclosure starts and completions hit new record lows amid the COVID-19 pandemic. They were down 80% from November2019 to November 2020. With this reality in mind, foreclosure deals might not be as big as they once were prior to the pandemic hitting. With a low inventory of distressed properties, competition is stiff for those properties that do hit the market, particularly if the property is in good shape. Higher buying prices means less of a profit when the property is flipped.

This has undoubtedly affected countless investors’ bottomline, but it can also create an opportunity to reevaluate strategy and pivot in2021 and beyond.

If you’re ready to explore financing options for 2021, contact Temple View Capital to learn more about how can partner with you.