With all realtors looking forward to the end of the pandemic, it’s worthwhile to understand how different housing markets in different locations will pan out.
When looking for properties in different markets, you need to ensure that you’re hitting the locations where rental properties are in high demand. To determine this, get data on the population growth along with a surge in employment opportunities in an area to gauge the demand for rentals within the area. If you can get the right location where there is a limited supply of housing for demanding tenants, you can ensure that your property will not go vacant. More importantly, with historic growth backing you up, you can rely on your property appreciating by a large amount over time.
However, with the pandemic, demands have shifted a little and it’ll take a keen eye to predict how the different housing markets will look after it passes. Let’s dive right in.
Housing Markets That Will Remain Strong after the Pandemic
Areas with major population growth over the past few months already have bidding wars going for properties on sale. Therefore, it’s safe to say these markets will become even stronger once the pandemic passes. This is due to the mass migration of people from the city to these areas. Austin, Texas is one example of a market booming during the pandemic. Here in Austin, the population has grown significantly throughout the months of the pandemic and has shifted the market dynamic in the area.
Despite promising growth, you shouldn’t fall prey to deal in these booming areas. Although you’ll be able to snag a rental deal that will not go vacant throughout the year, it’ll be hard to earn back the cash you’ve invested into getting the property in the first place. Therefore, your cashflow gets hurt and you won’t be able to make mortgage or loan payments. Moreover, the running costs of the property will quickly become a burden. To land safer deals, head further away from central areas and invest in the suburbs. Or better yet, invest in remote properties that offer a good balance between demand and potential cashflow.
Housing Markets That Will Get Hurt after the Pandemic
A lot of people have moved out of the cities and into more affordable suburban areas. Therefore, you can expect to see city rentals in lower demand after the pandemic is over. The commute to justify the higher living expenses to live in the city is now gone with many people working from home, and with many companies adopting the work from home policies even after the pandemic is over, it’s unlikely that city rental demand will pick up anytime soon.
Conclusion
Although the pandemic is still ongoing, it’s safe to say the lasting impacts on the housing market will stick around for a while. Therefore as a smart investor, you have to ensure that you’re well informed about where to invest and the prospects of investing in a high-demand area. Nevertheless, with mass migration in mind, and a rise in demands in properties outside of cities, you can expect a shift in the housing market as time goes on. It’s important to remember that the location of your property is crucial when it comes to striking the right deals in a shifting market.
