The Best Time to Invest Is Now?
August 26, 2016
Columnist Jeff Reeves with MarketWatch says right now is the best time ever to invest in real estate. He discounts fears by some about another housing crisis brewing – the uptick in “liar loans” or “Alt-A mortgages” and return of house flipping. He says any such bubble fears amount to “a lot of hogwash.”
“Whether it’s stricter lending standards, a shift in attitudes among borrowers or simply the nation getting wiser about the risks of real estate, we’re hardly seeing irresponsible buying in 2016,” writes Reeves, who is also the editor of InvestorPlace.com. “What we are seeing is a healthy housing market that continues to steadily and organically appreciate.”
As such, he says it’s prime time for investors to jump in.
Home prices are on the rise: Median home prices are above pre-recession levels and even reaching new highs in some locales. Appreciation is growing about 5 percent each year.
Also, some appreciating markets – notably Las Vegas and Florida metros like Miami, Tampa, and Orlando – still have real estate values below pre-crash levels.
Companies are stepping in to help more people become investors too. For example, Investability, an online real estate marketplace, says it offers tools like cash flow calculators that allow those interested in investing to input estimated vacancy rates and rental incomes from potential properties.
“Historically people invest within a 10-mile radius around their own home,” says Dennis Cisterna, chief revenue officer at Investability. “But in 2016, people want to invest in markets outside their own neighborhood.”
Other crowdfunding companies like Fundrise and RealtyShares are allowing people with less money to jump in as investors too. Fundrise requires $1,000 to join while RealtyShares requires a $5,000 minimum investment.
“Nobody should put all their savings into one or two properties, but in a diversified portfolio, there is a very good argument for real estate investments in 2016,” writes Reeves.
Indeed, Reeves quotes Luba Nikulina, global head of manager research at Willis Towers Watson, in his article: “The shift away from equities and bonds into alternatives has gained momentum, among most institutional investors around the world, as these strategies have helped to manage risk through diversity.”
Source: “This Is the Best Time in History to Invest in Real Estate,” MarketWatch (Aug. 23, 2016)
Updated: December 10, 2019