The world is in turmoil and the housing market is the same. But this might not be a bad thing for real estate investors and anyone who wants to buy a home, in general. Arizona’s housing market stands out with its positive dynamics even in these tumultuous times. That’s because, despite new viruses, trade wars, and many other issues that affect the global society, people still come to Arizona. They seek the opportunities and high standards of living that the state offers. And this isn’t about to change.
What Can You Expect from the Arizona Housing Market in the Near Future?
There is a lot of talking and disturbing articles about how the real estate market is doomed to crash soon. However, reputed sources are far less dramatic about this. It’s true that an economic recession is, pretty much, inevitable at this point. But while its impact is sure to be negative in a large way, it’s hardly going to be a repeat of the previous housing market crash.
The Arizona housing market, in particular, is looking very good. The reason for this is rapid development, which is a response to a high level of demand. Simply put, people want homes in Arizona, and construction companies deliver.
Granted, the rate of delivery is much lower than the actual demand. That’s because one really can’t build homes as fast as needed. There is also a concern that the construction effort will slow down significantly during the recession. That’s a consequence of a rise in commodities prices, which is guaranteed to occur.
However, as the situation stands now, commodity prices and interest rates are actually going down. Forbes reports that this dynamic might continue for a while, which is a good prognosis for the real estate industry, as a whole.
Moreover, the housing prices are rising and the overall situation in this industry seems to be as stable as it’s possible to be economically. The factors that indicated the housing market crash of 2008 are nowhere to be seen. Therefore, the only logical conclusion is that while a recession can come, it won’t be triggered by the real estate industry this time.
Consequently, this industry won’t be as deeply affected. It’s true that the buyers’ capacity will go down because of the high prices and lower income. However, active and strong markets, like the one in Arizona, are likely to remain strong.
The Impact of Foreign Investments on the Housing Market
One also shouldn’t forget that foreign investment plays a major part in the development of a real estate market. In the US, this particular route rakes up billions. The situation with foreign investors, however, isn’t overall reassuring. Based on data from moneytransfercomparison.com, which refers thousands of clients to companies specializing in large currency transactions, there is a general slowdown in investments by the Brits due to a poor Sterling rate.
There are also major concerns regarding the investments from China. Considering that China is the largest foreign property buyer in the US, on par with Canada, a slowdown from this direction will be trying for the real estate industry.
The main reasons for this particular problem are coronavirus and its impact on the Chinese economy. The entire world is reeling from this disease and its economic repercussions. The slowdown in the production in China has already cost over $2.7 trillion to businesses and economies.
Obviously, property buyers from China now have different priorities and a lower buying capacity.
On the other hand, technology keeps improving making it easier to become an international property investor. Money transfer companies, in particular, are to thank for this opportunity. Not all of them operate in the US, but the biggest are there and their terms are only getting better. As stated in the OFX USA review, it now has offices in the USA and Hong Kong, among other places. Moreover, it has announced that any transfer is fee-free, regardless of the volume.
TransferWise services are now also available in the US. Therefore, anyone who wants to transfer money to America to buy a property would be able to do this with ease. The aforementioned Chinese buyers, along with other property investors, can use this opportunity to improve their own situations.
Additional Factors That Affect the Real Estate Market Today
The global recession itself is a major factor that fuels the good prognosis for the real estate market. It’s true that the sales are bound to reduce somewhat. However, no one can deny that property is one of the most solid and secure investments. People understand this, so there’s a chance that they will try to buy homes as a form of security. It’s a reasonable enough way to protect oneself from economic instability.
Commercial and rental properties, in particular, are getting more popular today. The rental rates will go up as the buyer capacity diminishes. And rapid globalization and business development make commercial properties the highest sought-after type of real estate now.
China, in particular, is predicted to increase its investment in US properties as a consequence of the coronavirus craze. This tragedy resulted in destabilizing China’s own real estate market. Therefore, worried investors are rapidly looking for a way to secure their positions. With international payments becoming so cheap, they might abdicate to the US housing market very fast.
The Arizona market is one of the most attractive for investors. Not only does it keep growing, it also remains one of the most stable. Therefore, investors that seek to minimize risks, are most interested in it.
The world economy might be in for a recession. However, the housing market is looking good overall. Real estate in Arizona remains hot. And despite the fact that it grows more expensive, it’s also attracting foreign investment.
Overall, the real estate prognosis is quite good. Now might be a good time to buy a property as it’s predicted that prices will keep rising. While interest rates on mortgages are staying low, one should use an opportunity to get the home they need. Also, it might be a good time to become a property investor yourself.