The United States real estate market is rapidly changing. From changing mortgage rates to the government introducing new laws now and then, investors are more concerned about their investment security than ever before.
If you're planning to jump into the US real estate market, this article can be a savior for you. Before staking their money, let us walk you through the major real estate concerns investors may have.
1. Government Laws
Unlike other markets, real estate professionals in the US are monitored and regulated by the federal government.
They must follow specific guidelines and are often subjected to local laws and regulations.
The government limits how much money you can make from investing in real estate, which can be a problem if the laws hinder your dreams of becoming a real estate tycoon.
If you plan on investing in real estate, you must know what government laws might affect your investment.
2. The Market is Highly Fragmented
The US, real estate market is highly fragmented. When the market is volatile, there is no clear price movement trend or direction. If you are buying an investment property, always try to buy it for less than its fair market value and then sell it for more than the original price.
Volatility also affects how much money you will have left after paying off your loan and other expenses.
3. Low-interest Rates
Interest rates are low, but they're expected to rise slightly in the coming years.
The Federal Reserve announced on Wednesday that it would raise its benchmark interest rate by a quarter-point to a range of 2% to 2.25%.
The move was widely expected and followed the Fed's decision to increase short-term lending rates by 0.25% at its December meeting—the first increase since 2021. However, this could impact investments, which account for about 70% of all economic real estate activity in America each year.
4. Digital Real Estate
Most real estate platforms are backed by specific algorithms designed to make real estate property hunting easy. Such Algorithms are transforming how real estate is bought and sold at a large scale.
Using these algorithms may eat the job of realtors who get paid to find the best property locations at friendly prices.
However, most sites only show houses for sale, so you won't find any listing that's not up for sale. At the same time, other sites don't allow you to contact the seller directly, so you must go through an agent or broker first.
Real estate is an investment that can yield excellent returns, but it's also a traditionally conservative market. If you're just getting started in the market and have no idea where to start, we hope this guide has been helpful!
Although these concerns are inevitable, there are always ways to resolve your real estate issues with a reliable brokerage firm like Gosen Properties.
From condos to full-size apartments, we take care of everything from buying, selling, leasing, renting, and everything in between.
Backed by a team of real estate professionals, we understand the New York real estate market well and vow to find the best properties at the most affordable prices.