Since the beginning of the Coronavirus pandemic, economic uncertainty has loomed above our heads. Investors aren’t sure whether to be cautions due to the dramatic impacts of world wide shut down (permanently shut down businesses and high unemployment), or the second order effects which will come from printing trillions of dollars in stimulus packages. (For reference, the initial three trillion which was created in 2020 now accounts for approximately 40% of our currently circulating money supply.) Regardless, they’re deeply concerned. The underlying sentiment for tycoons and small scale investors alike is to carefully navigate these complex and unprecedented times.
Economic uncertainty calls for precautionary action. While all investments innately have risk, due to the reasons outlined above and more, the real estate market has a relatively low risk compared to equities, bonds, and other traditional assets. Additionally, interest rates are exceptionally low. Just two years ago, in 2019, interest rates were ~4.25% on a 30 year mortgage, however, during the height of the pandemic interest rates astonishingly went below 2%. And while rates have risen some over the past year (~.25%), the opportunity remains. Low interest rates create an ideal environment for those looking to build their wealth.
Wrap Up
Macro-economic conditions are steering large amounts of capital into the real estate market. Savvy investors anticipate an inflationary environment in the near future, and are acting accordingly by allocating more of their portfolios into hard assets. Hard assets, like real estate, preserve purchasing power so many investors use their positioning in real estate is a defensive measure. However, low interest rates entice some investors to move aggressively. Thus, we find ourselves in this hyper-active housing market full of opportunity.
Whether you’re looking to buy, sell, or rent a property, Thunderbird Property Management and Realty Company will be your best ally. We are industry experts, and help you navigate and identify exciting opportunities so you can invest with confidence.
