Steps to Taking a Real Estate Market Analysis

A successful real estate investing campaign begins with careful real estate market analysis. Your real estate market analysis will assist you in making the right investment decisions when buying a home and help identify possible opportunities and risks in the market. The process of market analysis is more than just crunching numbers and coming up with numbers; it is an effort to understand and interpret the current real estate market so that you can make informed investment decisions. Market analysis can be a difficult task and is best left to real estate professionals and financial planners who are experienced in the real estate market.

Real Estate Comps

In order to get a good real estate market analysis, there are a few things that you need to do. The first thing that you need to do, is to find some real estate comps that will give you the price range of the houses in your neighborhood. These can be found online for free, and if you use them you can get a good idea of what the houses currently sell for, as well as what the average home price should be. You will then be able to determine the exact price range for your home, and this will help you set your limits, so that you don’t overpay for your new home.

Absorption Rate

Real estate investors and brokers have access to many indicators that can help them analyze the real estate market and identify opportunities. One of the most important indicators of health in the market is a good absorption rate. Good absorption rates indicate that the market has enough buyers to keep prices low and homes on the market for sale. There are several ways to obtain a good absorption rate, including conducting real estate market surveys.

Supply and Demand

Another important component of a good real estate market analysis is calculating the impact of supply and demand. In order to properly calculate the impact of supply and demand, you must know the overall supply and demand conditions in your area. This type of analysis is very complex and should only be handled by those who are well-versed in real estate investment decisions and trends. Real estate investment decisions and trends are cyclical in nature, so it is important to review your investment options periodically based on current market conditions. There are many ways to correct for fluctuating market conditions, but a knowledgeable real estate investor is better able to spot the signs of a potential problem and take steps to mitigate the impact before it becomes a problem.

Vacant Properties

When looking at the inventory in a neighborhood, you will also want to take a look at vacant properties. This is an important part of determining a real estate investment property’s value. Many investors try to buy homes without taking into account how much inventory is on the properties. Vacant properties have a lot of value because their owners are simply not using them. Homeowners who are looking to sell will often times let these properties go for much less than their fair market value because they are trying to unload them.

All of this information is extremely important to determining the correct asking price for your house when you’re negotiating with any potential buyers or sellers, and you need to make sure you have all the facts before you ever consider approaching another party about purchasing a house.

How the Cryptocurrency Act of 2020 will impact Real Estate

March 13, 2020

Jay Brent

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The Crypto-Currency Act of 2020 was introduced in draft form to the United States House of Representatives in December of 2019. The purpose of the Crypto-Currency Act of 2020 is to make progress clarifying the regulation of Digital Assets. It separates these Digital Assets into three categories: crypto-currencies, crypto-commodities, and crypto-securities. Real estate is part of the crypto-securities category.

Crypto-Securities Regulation

The Crypto-Currency Act of 2020 states that the tokens of crypto-securities represent “debt, equity and derivative instruments that rest on a blockchain.” It goes on to state that this includes those that are governed by “smart contracts and collateralized by other digital assets.” Real estate is part of this and it is regulated by the Securities and Exchange Commission (SEC.) The Crypto-Currency Act of 2020 requires the tracing of transactions. The act emphasizes that crypto-securities transactions will be regulated much like current real estate transactions in a manner similar to what financial institutions require for regular currency transactions.

Opportunities For Safer Real Estate Transactions With Crypto-Currency Technology

The proposed Crypto-Currency Act of 2020 will allow businesses and institutions, such as real estate-related companies, brokerages, and professionals, who are looking for growth in crypto-currency technology to have the opportunity to participate in this new wave of business. The act calls for all transactions to be traceable which safeguards criminal financial activity, fraud, and money laundering. The act is applauded by the crypto-currency world and is being embraced by the real estate world.

BitPay

During the past four years some developers, builders, and complexes have already started to partner with companies, such as BitPay, that provide Bitcoin payment for real estate transactions. BitPay is the world’s largest processor of bitcoin. It acts as a payment processor for home buyers. The firm BitPay exchanges bitcoin into dollars and transfers the funds on behalf of the buyers. The funds to purchase real estate are transferred to the buyer’s escrow agent at closing. BitPay has already processed millions, close to billions, of dollars in real estate transactions for individual buyers and corporations.

Who is Already Onboard?

So far crypto-currency real estate transactions have been for very high-end home and commercial real estate. The average home purchased with crypto-currency is approximately $1 million. It processes real estate transactions in some of the world’s highest-end real estate markets such as Dubai. More recently they are processing crypto-currency real estate transactions in a condominium resort complex near the Walt Disney World area in Orlando, Florida. Clients from all over the world are flocking to this crypto-currency real estate opportunity. They are coming from countries such as China, Brazil, and Turkey. This community only allows crypto-currency transactions for the purchase of their condominiums.

Bitcoin Holders to Diversify Portfolios

Crypto-currency has been around for quite a few years now. Investors are looking for ways to diversify their cryptocurrency portfolios. Real estate is the obvious choice. With the enhanced regulations of the new Crypto-Currency Act of 2020, more and more investors will be using cryptocurrency to purchase both commercial, residential, and luxury real estate. It is important that developers, builders, and real estate professionals learn more about this method and process of purchasing real estate because it’s not going away anytime soon.

Opportunities For Real Estate Professionals

Real estate agents, brokers, managing brokers, attorneys, title companies, mortgage lenders and all real estate related professionals should hop aboard the crypto-currency train while interest rates are low. Purchasing real estate with crypto-currency is going to become more and more popular and common in the years to come. There is an opportunity for real estate professionals to earn more money for their services if they are educated about purchasing real estate with crypto-currency. Also, some real estate transactions and communities will be for crypto-currency purchasers only. So if real estate professionals aren’t educated and don’t practice these types of transactions, they won’t be able to earn a commission for these sales opportunities.

Advantages For Buyers

Crypto-currency transactions settle within seconds. This is very advantageous for buyers because they won’t have to physically go to the bank to get funds for their real estate closing or arrange and wait for a wire transfer of funds. This will save everyone time at closings. It will save time for attorneys, title company personnel, escrow company personnel, lenders and more. All of these real estate related professionals will free up time for other clients and transactions. Buyers will have the keys and be in their new homes faster than ever.

The Crypto-Currency Act of 2020 is a sign that cryptocurrency is here to stay. Just like any type of technology related to real estate, real estate professionals need to stay on top of trending and new technologies if they want to continue to grow and evolve in the future. Their commissions and earnings are depending on it.

State of Real Estate in the U.S. Market for 2020

January 11, 2020

Jay Brent

Where does the real estate market stand for 2020?

This year big changes are expected in the real estate market. Some of these changes will be better for buyers while others will spark competition, possibly creating bidding wars, for the same properties. How will the recent strike on Iran affect the property market? We will look at what to expect in 2020 and trends the experts feel will emerge below.

Home Buying Rates

The airstrike in Iran is solidifying low rates in the housing market. Many investors are deciding to switch from real estate investment trusts, or REITs, and real estate investment groups to traditional stocks and bonds. After the assassination of one of Iran’s top military officials, investors worry about housing loans for military members that could be called into action and others who might move frequently.

Since Fannie Mae and Freddie Mac are predicting even lower mortgage rates at 3.65 and 3.625 percent, first-time buyers have the opportunity to cash in on a rate they can easily afford. The sooner the better, because Forbes predicts housing prices will go up as the year continues. The first half of 2020 could be the best time to apply for a new mortgage.

Who Is Buying Up New Homes

Realtors are getting better at working with younger generations. Millennials are the age group looking for houses to buy across the U.S. The problem is many baby boomers are living longer and holding onto lifelong properties. The younger generation is helping grandchildren get on their feet with large properties and homes big enough for two or three generations to live in comfortably. The younger age group wants to purchase a first or second home, but the availability is not there for their price range.

What types of homes are expected to sell in 2020?

New construction

Growth in building new homes will not offer enough help to inventory rates fast enough say expert publications like Forbes. Another problem is that the new construction is mainly in the higher property brackets. Since millennials are seeking affordable housing options at entry prices, the new properties are not accessible for these groups. Realtor says the numbers for new construction are higher than last year at this time. However, the addition of new construction homes is not going to help the majority of the group looking for a house to buy.

Inventory levels

With the construction home types and the number of people looking to buy homes, inventory levels for people seeking an entry-level property are shrinking. This is especially the case where large technology companies are building out new facilities. As an example, we have seen a tremendous uptic in the interest in condos for sale in Arlington because of Amazon’s new presence there has brought tremendous demand for housing.

Other growing tech hub cities such as Boston and New Orleans are attracting millennials too. We expect Boston’s real estate market to continue to drive out many affordable housing options.

With inventory expected to shrink in 2020, especially in the more affordable areas of the real estate market, it may become harder for first time homebuyers to get in, even with the more attractive mortgage options. This means a lot of unhappy people who will go through bidding wars only to find that someone else will get the property they love. Then, these groups will face going through the process all over again.

Some people may find they have to put in multiple offers, look for homes before they hit the market, or find a way to increase their budget to get into a home in the neighborhood they want. Another problem is the increase in minimum wage across the states. People can afford a house for the first time in many years, so there are more people looking for homes driving the available property numbers even lower.

Which area will interest buyers the most

Since many millennials are going to see dwindling inventory rates, these groups will look towards purchasing in the suburbs. These areas offer the best of both worlds. The suburbs have quick access to everything the city can provide while giving new buyers a friendly neighborhood atmosphere with room for the family to play at local parks, go for jogs on walking trails, and stay away from the smog in urban areas.

How interest rates effect real estate markets — How will the low interest rates affect the real estate market in 2020?

Real estate will see digital trends grow

Online mortgage applications are just the start of the newest trends 2020 will see on the web. Mortgage brokers will scramble to add income verification tools and electronic signature software to online portals. Millennials are savvy with this technology, so lenders will have to up their game to stay competitive. If they want to get the business they need to thrive, then upgrading to digital real estate technologies and sites is a must. Many real estate brokers are looking at different, disruptive technology and business models which include packaging the home loan. Although the one-stop-shop idea for real estate is not new, we are now seeing the technology to implement it.

Buyer trends will affect the property market just as much as global happenings like the Iran strike. While mortgage rates are expected to continue to stay low, the inventory levels available in many popular cities like New Orleans, Los Angeles, Boston, Arlington VA, and Miami will be lower than usual. Landlords and sellers will find that quantity is not always quality. Some buyers may be extending themselves too far in order to compete, so checking references and debt-to-income ratios will be extremely important for people selling property this year.

Real Estate Firms Get More Technologically Savvy

With the explosion of home buying and selling taking place on the internet, we expect technology to play even a larger role in the real estate transaction. we expect to see successful real estate companies focusing on their digital marketing presence. Data driven marketing coupled with larger companies taking their eye off the ball, we expect big changes in 2020. With the pricing for search engine optimization coming down, expect to see smaller companies leveraging digital marketing too. Up until now, huge venture capital funded real estate websites have dominated the landscape. With sites like Zillow changing direction; expanding to the iBuyer market, we expect the larger, more successful real estate brokers to start picking away at real estate search terms.

2020 Will Be a Shift from the Past

With all of the changes barrelling at us at full speed, spearheading by technology, low interest rates and new real estate business models, 2020 is expected to go down as a pivotal change in the way real estate transactions take place with new winners and losers.