Will 2020 be a Great Year for Property Investors?



Will 2020 be a Great Year for Property Investors?


The real estate market in the United States is massive and this means that it rarely moves quickly. It is so big that some markets can be booming while others are undergoing dramatic restructuring. Even within the same physical market different types of property can be more in demand than others.


So, asking whether 2020 will be a great year for property investors is a bit of a loaded question – especially when the economy is potentially nothing more than an errant tweet from panic. However, the market continues to hum along with some investment banks stating the U.S. has reached another goldilocks period, even as the country gears up for another election.


No Recession Here


Despite concerns about an economic slowdown earlier this year, the most recent news from Wall Street and Main Street indicates that the U.S. economy is continuing to expand. Granted it’s not growing at the three or four percent some thought it would be following tax continues but the current period of economic expansion, now the longest in U.S. history continues.


For real estate investors, this means that even those prices in most markets are at or near historic levels, significant upside remains. Add to this the fact that interest rates remain low and yields on investment properties continue to attract interest.


As such, the biggest challenge for investors who are seeking to buy into the market might be how to find bargains. This could include looking into off-market opportunities or wholesale real estate.


If you’re interested in wholesale real estate in Atlanta, then you could work with a firm similar to Skystone Acquisitions which helps investors “in acquiring and reselling residential investment properties.” In this way you could find a way to source opportunities


Beyond this, many of the structural imbalances which led to the implosion in the housing market in 2009 and 2010 are not at play this time around. There is not the same level of oversupply and over-leverage, which led to the market across the country collapsing.


As such, it looks as if the fears of a 2020 recession might be overblown, at least for now. While this doesn’t mean that a contraction won’t happen, the warning signs which were flashing bright red before the last recession are not currently at play.


What’s Driving the Market?


For starters, liquidity. Unlike 2009, the world is essentially awash in free money and this is leading investors to be willing to take managed risks. This has led to a large pool of capital with no place to go and when this happens investors start to take a closer look at real estate.


This is because real estate investments generally offer three advantages over other opportunities, being generating cash, appreciating, and relatively easy to sell. While real estate is not considered to be a liquid investment, it is usually easier to move than other investments such as private equity or more exotic alternatives.


Another factor that could drive the real estate market in the coming years is the need for institutional investors to pursue consistent returns at a time when an increasing number of the stakeholders will start to dip into their funds. This is especially true for pension funds which need to meet the obligations due to a growing number of Baby Boomers who are retiring.


Millennials and the Silver Tsunami


Let’s face it Millennials are adults now, with the oldest members of the generation reaching their late-30s and early-40s. If they haven’t yet, many are starting to settle down and start families and this means buying a home – even if those homes aren’t in areas where previous generations tended to congregate.


This does create a challenge for market participants as there is a potential mismatch between current inventory and where buyers want to live. However, there are opportunities as many Millennials are expected to be less affluent than previous generations and this means they are more likely to rent rather than own over the long run.

As far as Baby Boomers go, it is quite a different story as a recent survey from the Harvard Joint Center for Housing Studies indicates the number of Americans over the age of 80 will double by 2035. What this means is that more will need to move into some form of senior housing – creating an opportunity for investment in senior housing.




What does this mean for the housing market in 2020? For starters, the expansion looks set to continue for at least another year and when coupled with low-interest rates this should help investors who are seeking to expand their portfolios. Over the longer-term demographic shifts will have a massive impact on the real estate market and this could drive investments well into the next decade.

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