Now the big story is what is happening the real estate market on top of the stock market on top of the economy on top of unemployment on top of you name it. Well, this video we’re going to talk about the real estate economy and what is on the forecast for 2021. The moratoriums are gonna end the banks are gonna foreclose it is coming. Well, that may just some level be true. I’ve come up with some of my own thesis is based around the the reading I’ve done in some of the videos that I’ve watched from some of the best experts around to try to come up with some of my outlook of how I’m going to approach 2021.
𝐉𝐨𝐢𝐧 𝐎𝐮𝐫 𝐏𝐫𝐢𝐯𝐚𝐭𝐞 𝐅𝐚𝐜𝐞𝐛𝐨𝐨𝐤 𝐆𝐫𝐨𝐮𝐩
In the real estate market. One thing is glaringly obvious, and it was true amongst all reports is that to end 2020, we are going to continue to go straight through as we have been with appreciation, low properties on market, high demand numbers, you know, continuing to increase and set new records, that is going to continue all the way through the end of 2020. Now, first, why would this be? And how should you be taking advantage of the current times and or should you be sitting on the sidelines? Well, based around everything that that is out today, the interest rates and the Fed have no interest in raising the interest rates, that likely will not change going into 2020. And from everything that I read, there doesn’t seem to be anything out there that says in the first quarter that they would be raising those interest rates. So many of Americans, maybe even including yourself, are taking advantage of this incredibly low interest rate, which means when the prices of homes start to increase, it’s not as big of a deal because it gets counteracted by such low interest rates. So someone that may have been in a market for a 400 $500,000 house, by the market appreciating, you know, three, four or 5%, they don’t really care because the interest rates stay so low in the threes, that it really helps them afford a more expensive home. Now, as I mentioned just a short while ago about this moratorium and the foreclosures while this could actually come and transpire, it doesn’t look like it will until the middle of 2021. Now I don’t have a crystal ball and anything can happen. But for all intents and purposes, we do see that, you know, between the ending of the moratorium sometime in the first quarter, in the how long it takes for the banks to actually go through the foreclosure process.
We are especially myself, I have not seen a lot of reason to think that that is going to be a big wave of opportunity going into quarter one or quarter two for 2021. In my own humble opinion, I actually see that there could be some sort of transition in the bank slashed, the government may have to make some moves in that 180 days to figure out how not to go back into some great recession where the banks get flooded with foreclosures, etc. So I don’t see this being a big issue until we get into q3 of 2021. Now with the high demand and low inventory, now this goes into the rental market. Now, not everyone can go buy a home because there’s not enough homes out there to buy. So what now happens is people need to start to rent. Now, that so far through, you know, this entire, let’s call it nine months or so of this pandemic, rents have been pretty darn good, probably a lot more positive than on the outset of this. However, we are seeing a very, very small decline of rents being paid and part of that has to do with employment, although employment also stands relatively strong as well and keeps the rental market high. This my friends will continue to happen as you start to take this office space situation and what I mean by that is a lot of the big companies are no longer requiring anyone to come into the office. And so now a lot of people’s are having to live in the downtown cramped area and actually are being able to work from home. And are starting to move outward from the highly densely populated of downtown’s. This is creating its own craze in and of itself. So because there’s nothing on the markets as a moment in time, there’s actually a big rental craze because they can’t even go buy something even if they want to or have the capital to do it. This is continued to keep the rental rates at an all time high, as well as vacancies at an all time low. With that said, of course, as long with the positive there is the negative, we are just above. According to core logic, we are just above 1% of non payment on mortgages and properties going into foreclosure, which quite honestly is not a terrible number, this 1% qualifies as 150 days past due on their mortgage, and that means they’re going in to foreclosure. But again, it’s per core logic, it’s 1.2% of homes. alongside with that news, you have over 600 or 6 million individuals who have been reported late on their rental properties. And so that is also not ideal, but given the actual large numbers of what is performing good versus what is performing bad. Quite honestly, we are still in a very favorable position. Here. Again, the interest in demand is highly outweighing any type of supply. And because we are likely not going to see a influx of supply based around the moratorium in the foreclosure process. Zillow as a matter of fact, has said that they are seeing estimations of 7% appreciation all the way up into the point of September 2021. Again, some of this may seem shocking, any and all references are going to be below in links below. If you’re liking this video, it’d be great for you to smash the like button, it helps the YouTube Gods help me out and get more of my videos out front. Now, the question starts to pose is it the right time to sell? Or is it the right time to buy? Because interest rates are so low? That is something you yourself are going to have to answer because in my opinion, it is a great time to sell. But here’s the counter opposite of that is if you sell Where are you going to go? We just talked about how there are record lows for inventory. And yes, mortgages are an all time cheap in terms of interest rate. But where are you actually going to go buy another property when there’s no other property be had, one thing that is happening is people are starting to level up because of the interest rates are actually so low. So someone may sell a home, call it $700,000 sale price, they might then go buy a million dollar property because they’re starting to level up because of the interest rates. This is also happening as well as people from out of state such as California are moving into markets like Texas, V. Arizona, and Nevada, and taking a lot of that money not only using it for a property for themselves, but also starting to 1031 exchange some of that money into rental properties. Because rents are an all time high. And non payments of rents are are really low.
They are using that opportunity to make a new investment and sell their million dollar properties in California and take that money and actually start making investments in some of these cheaper states on a 1031 exchange, which again continues to keep the market at an all time high, because that money essentially has to be used anyways. So they don’t necessarily care what they pay for it with respect to their ROI or cap rate. They want to make sure they’re buying a good investment. So what I would say is this initially out of the gates, the reports of doom and gloom, were pretty obvious. We all kind of even myself thought, Man, this could get pretty tricky in the real estate market. However we have seen over the last nine months, honestly, the market is doing better than ever. Now, some of this may come to fruition in 2021. But I personally have a very positive outlook on what’s going on in the market, especially because of how the big corporate companies are actually dissolving these big offices in downtown people are able to work from home. They’re needing more workspace and live space, which allows them to buy more homes because employment continues. So their income continues potentially even raises. The interest rates are an all time low. They’re moving out of the city, more homes are being bought than ever before. It is incredible. So I remain optimistic. With that said I did mention just a several minutes ago about the moratorium in foreclosure. Zillow mentioning that shouldn’t catch up to us till about September of 2021. I would start to keep an eye out on it a little earlier than that. Anything can happen. My own opinion, truthfully speaking is I think big government’s going to have to step in. I’d be interested to hear your thoughts about that. Please those thoughts below again, smash the like button hit the subscribe button if you would. And with enough uptake in these foreclosure proceedings here, it did increase to 1.2%, which was a 20%. uptick here recently, I do think is something to be watchful of. However, I don’t think it should be something to be overly concerned about going into q1, I would start to be a little bit more watchful going into q2. But even with all these foreclosures, I think big, big, the government likely is going to have to step in somewhere I don’t believe the banks are going to be able to withstand as many foreclosures that will happen, I do something do believe something is going to get worked out. I also believe banks are going to work it out with the homeowners themselves, as long as employment stays high, which is again back to the government to keep businesses open. This whole thing is crazy. I would love to get any and all feedback from you. Please comment below, hit the like button. Also, if you are actually into real estate, go over to the science flipping.com I have a bunch of free resources there for you. And I hope to see you guys on the next video. Also check out my podcast, the science of flipping just go to iTunes, Spotify or any of those carriers. Check out my podcast the science of flipping I drop a podcast today if you’re interested in real estate besides that, guys, I’ll see you on the next video. Peace.