Is it time to grab your equity and run?
It's a crazy time in Wenatchee real estate, whether you're a buyer, seller or involved in the industry as a professional service provider (agents, title companies, home inspectors, etc). Buying and selling activity seems to be in a frenzy across the nation. There are a number of factors involved and, although I'm no economist, I have my opinion about the two main factors contributing to this unparalled flurry of activity: 1) Low interest rates, 2) Purchase of Investment Real Estate.
The first factor is the obvious one... low interest rates. There has never been a better time to get in on low interest rates, allowing us to buy more home for the money. The second factor is the amazing rush to buy investment properties. In Wenatchee, we (as agents) are experiencing a serious shortage of investment properties to sell. This has driven prices up on those that are available... the old supply and demand theory (which is not theory at all, but a reality). Prices on investment properties have gotten so ridiculous; I've noticed a tremendous surge in new contstruction of multi-family housing units. Behind my house there were 28 new units built recently. This consisted of four tri-plexes and four four-plexes. No sooner had the dust settled on that construction and three more four-plexes (12 units) went under construction right across the street from me. There have been other much larger developments recently, as well. It makes me wonder with (seemingly) everyone buying a home of their own, who is going to be living in all these rental units?
Multi-family units are not the only rentals being put into the market. There is also a tremendous amount of "second home" buying going on. Many people are taking out home equity loans to by a second home to use as a rental property.
I know. I know... not everyone owns a home, but it seems like that's what's happening. What I do see happening is that all these rental units being available is that the rent rates will be held more stable. We will not see a significant increase in rental rates; such as we have seen with single family home value. Eventually, this record rise in home values with level off. Perhaps, then, renting won't seem like such a bad option for those whose lifestyle it would serve. If a person was very disciplined about investing the equity (and the monthly savings) it could be an interesting ride.
Just some things to think about...
Have a great day!
Carol
The first factor is the obvious one... low interest rates. There has never been a better time to get in on low interest rates, allowing us to buy more home for the money. The second factor is the amazing rush to buy investment properties. In Wenatchee, we (as agents) are experiencing a serious shortage of investment properties to sell. This has driven prices up on those that are available... the old supply and demand theory (which is not theory at all, but a reality). Prices on investment properties have gotten so ridiculous; I've noticed a tremendous surge in new contstruction of multi-family housing units. Behind my house there were 28 new units built recently. This consisted of four tri-plexes and four four-plexes. No sooner had the dust settled on that construction and three more four-plexes (12 units) went under construction right across the street from me. There have been other much larger developments recently, as well. It makes me wonder with (seemingly) everyone buying a home of their own, who is going to be living in all these rental units?
Multi-family units are not the only rentals being put into the market. There is also a tremendous amount of "second home" buying going on. Many people are taking out home equity loans to by a second home to use as a rental property.
I know. I know... not everyone owns a home, but it seems like that's what's happening. What I do see happening is that all these rental units being available is that the rent rates will be held more stable. We will not see a significant increase in rental rates; such as we have seen with single family home value. Eventually, this record rise in home values with level off. Perhaps, then, renting won't seem like such a bad option for those whose lifestyle it would serve. If a person was very disciplined about investing the equity (and the monthly savings) it could be an interesting ride.
Just some things to think about...
Have a great day!
Carol
Posted on Tuesday, May 24, 2005 at 11:51AM
by
Carol Williams
in Miscellaneous news, info, ramblings
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Carol Williams
in Miscellaneous news, info, ramblings
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