Overview Of The Current Real Estate Market
Overview Of The Current Real Estate Market
We are currently living through an exciting - some may say scary - time in history, where the economic landscape is changing rapidly; and those who struggle to keep up will be left behind.
Real Estate is currently a ~250 trillion dollar industry. That in itself presents both risk and opportunity - both of which investors need to be acutely aware of.
In this report, we will encapsulate the state of the current real estate market. Then, we’ll include a brief analysis of some of the risks you need to be aware of, and the exciting new opportunities arising from it.
The hangover from Covid-19, and its ongoing impact on the economy at large cannot be overlooked.
For example, as of March 2021, overall COVID costs totaled $5.2 trillion. To put that into perspective, World War II cost $4.7 trillion (relative to today's money). By mid-2021, this figure was approaching $13 trillion and growing. [1]
These figures are astronomical.
To stimulate spending, the central bank initially lowered interest rates. This, combined with aggressive levels of money printing, caused inflation rates to skyrocket - likely to higher levels than are being publicly represented.
While bonds fluctuated, stock values increased in ‘20 and ‘21 (as investors and individuals looked to preserve purchasing power). The S&P had its worst start to a year since 1939, falling more than 13% between January and April of this year. [2]
We are now on the cusp of a potentially massive hangover as the markets begin to crumble in the heat of an over-inflated market.
So, What Does This Mean for Real Estate Investors?
According to S&P Case-Shiller, home prices jumped nearly 20% in February 2022, making it increasingly more difficult for first-time buyers to get on the property ladder. [4]
According to Realtor.com, "for a median-priced home financed with a 30-year loan, the monthly payment is $550 higher than a year ago - an increase of 46%."
In addition, interest rates are expected to surge throughout 2022, decreasing its allure, due to increased risk and market uncertainty.
Other factors likely to put off future buyers (due to high costs) are:
- Appraisals,
- Taxes,
- Insurance,
- Deeds, and
- Titles
In addition, when considering the time it takes to complete a real estate purchase (anywhere between 30 to 60 days minimum), the traditional retail market model is beginning to erode alpha - driving buyers to seek out new ways to invest in retail.
Growth in commercial real estate sales has also exploded with the change in interest rates.
Throughout 2021, investors were grabbing everything they could get their hands on - from apartment buildings to warehouses, distribution centers, and hotels.
As of Q2 2021, nonresidential property sales were up 16% compared to the year prior, [3] and this strong demand is likely to continue.
Combine that with rising inflation, and loans becoming increasingly more expensive - due to the expected hikes in interest rates - and savvy investors will soon start looking for new investments to secure greater yields, with less overhead and capital requirements.
The Real Estate Market’s New Future
Blockchain and cryptocurrency are changing the world and how we do business.
This innovative technology sits at the intersection between finance, lending, and traditional markets. Algorithmic work and code on the blockchain are becoming more secure and reliable - making a once-feared market more attractive than ever.
As savvy investors and retail begin to understand its tremendous upside, (especially for those quick to adopt it early on), immense opportunities for real estate investors will continue to rapidly emerge.
One such opportunity is LiquidAcre - a cryptocurrency real estate company based in Texas, offering fractional acreage investments and ownership - leveraging the power of Non-fungible Tokens (NFTs).
LiquidAcre is the world’s first international crypto-to-land broker, at the vanguard of merging the ~250 trillion-dollar real estate market with the crypto space.
Not only does the LiquidAcre marketplace speed up transactions times from 30-60 days to 30-60 seconds, it also eliminates:
- Appraisal costs,
- Taxes,
- Insurance costs,
- Deeds, and
- Titles
The results are significant savings passed onto the investor, decreased risk, and potentially huge upside - simply by utilizing the power of the blockchain and peer-to-peer trading, over a once complicated marketplace that favored the broker.
You can visit https://liquidacre.com/ to explore the solutions, opportunities, and emerging innovation on offer for sophisticated real estate investors. This is a great opportunity for those looking to get exposure to cryptocurrency, and hold real, physical land, whose ownership is verified on the blockchain via multiple sources.
Reference Links:
[1] https://www.nasdaq.com/articles/money-printing-and-inflation%3A-covid-cryptocurrencies-and-more
[2]
https://edition.cnn.com/2022/05/02/investing/stocks-sell-may-go-away/index.html