Why is now a good time to invest in real estate

[Mary Derman]

From amazing returns in the early nineties to a plummeting crash that sent repercussion’s world-wide into every sector, the real estate market has had its highs and certainly its low. When investing in real estate as well as looking from an outsider’s perspective, it can be skeptical. Since the crash of ’07, many people view investing in the housing market as a dangerous game that could very well burst again. With that being said, I’m here to put some of those worries to rest. As all investments do, the real estate market has some risks especially if you’re not making smart decisions when deciding where to invest your money. Since the crash of ‘07 there has been a slow but gradual recovery for the real estate market.

A lot of this recovery is primarily linked with millennials coming of age and buying/renting homes as well as homebuilders constructing these homes. Reports from last year show that 2016 had the most homes sold in nearly a decade, specifically in the month of July, where most of the housing purchases occurred, all of which were bought by millennials. Millennials have been slow to move out of their parent’s/relative’s homes whether that be to a constantly fluctuating job market, saving money, or simply because they have no desire to leave. When they do leave, millennials tend to buy or rent smaller homes and apartments. Past trends regarding older generations have usually seen young adults, primarily in mid-twenties, buy bigger homes which are more focused on family building, since millennials are shifting away from these past trends and wanting to live in smaller homes there has been a high demand for said houses. Because of this, homebuilders have been constructing houses at a pace of 1 million a year since 2015, nearly doubling any housing construction that was occurring in 2009 and subsequently after. What this is telling many people is that there is a supply being created at the lower end of the real estate market specifically geared towards smaller homes usually under $300,000, these are exactly the houses that young adults can afford today and what I personally believe many realtors need to be pushing now towards clients. Within the years to come, the market is sure to see a steady increase in home buyers and renters specifically from millennials which will continue to benefit the health of the real estate market well into 2018 and beyond.