Market Insights: Real Estate

Real Estate property acquisition in 2020

The Covid-19 pandemic made a complete lockdown of the economy all around the world. The instability of the stock market is rising and investors are seeking more secured options.

The best real estate investing strategy during this time is finding properties that cash flow today but also have a great chance for appreciation over the long term. Real estate is one of the top investments for the majority of Americans even during COVID (35%), ahead of stocks and bonds (21%), savings accounts (17%) and gold (16%). To determine a good real estate option, job growth, population growth and affordability should be considered carefully.

Residential real estate

The crisis has emphasized the importance of shelter and protection in rough times which will increase the demand for residential real estate in the post-COVID-19 world. It is said that it is the best time to buy real estate because it’s less volatile than the stock market. Also, there isn’t as much competition from other buyers. Interest rates are also so low right now, it makes cash flow on affordable rental properties even stronger in most markets. The buy-to-let property offers an excellent source of passive income, via rental payments and capital growth, through price appreciation.

Commercial real estate

Commercial real estate is an extremely important asset class. Commercial real estate, which encompasses the hard-hit hotel and retail sectors are the most affected asset class within the real estate for obvious reasons. Hotel stocks around the world have seen a significant fall in stock prices in anticipation of falling occupancies and room rates. So far this year, the commercial land market has fallen almost 28%, with hotels & resorts and retail spaces down 48% and 40%, respectively. Retail and hospitality properties are seeing immediate negative impacts of voluntary social distancing and stay-at-home orders. Even though travel restrictions are easing around the world, the hotel industry won't be stable until the world controls the pandemic situation.