Optimism Reigns in Residential Property Investment
If we were to conduct a survey on what we expect for this new year, I am sure the vast majority of those surveyed would say: “Anything better than 2020.” However, the real estate sector, primary home loans and refinancing have not suffered the ravages of the pandemic to the same extent; and real estate remains one of the most attractive investment options for consumers.
By Jorge Ignacio Rodríguez Suárez | @jrsrealestatepr
In our new reality, the need arises for what should be a comfortable and practical home that allows us to work and supervise our children in their virtual classes and study assignments. The search for properties based on proximity to the workplace and the place where our children study will not have as much weight as before.
This presents an opportunity for new housing alternatives outside the urban area. The increase in the development of new projects and the approval of construction permits will play an important role in the real estate market to meet the growing demand in investment of primary residences, as long as mortgage interest rates remain at historically low levels, as they are expected to.
The pace of approval of the Direct Buyer Assistance Program disbursements for low- and moderate-income families, and essential recovery personnel from the U.S. Department of Housing, will go a long way toward continuing to increase sales of existing homes, at least until mid-2021. This program underwent many changes in recent months, delaying the mortgage closings that depend on this aid. It is expected that in the first quarter of 2021 we will begin to see an increase in the approval of mortgage loans with disbursements from this program.
Did you think I was not going to talk about the vaccine? It would be irresponsible of me to speak of the enthusiasm with which we began this new year, without mentioning the impact that vaccination against COVID-19 is going to have. The first phase for health workers in high-risk environments has already begun and will progress in a phased manner to the other phases until reaching 70 percent of the vaccinated population and achieving the coveted “community immunity.”
At a time when everything has been tried to mitigate the economic and social impact of the pandemic, it is the best bet to recover the lost jobs and start the engine of local companies, which are the ones that generate the most jobs in the private sector, among others.
In 2020, a large number of the properties that entered the market for sale lasted approximately 21 days before being optioned. This year, it is expected that that number will be lower and that competition between buyers will be the same or stronger. Buyers are willing to spend more on a home now than they did last year, as reflected by the trend in rising home prices.
Recently, cases of new variants of COVID-19 have been reported and this could dampen hopes of recovery. No one knows for sure when we will defeat this pandemic, so we must get used to this new normal and reinvent ourselves. The transition is going to take time, possibly three years or more, according to experts.
It is time to work as a team. The private sector, the fiscal control board and the government must focus on finding ways in which federal programs and aid to stimulate the economy can be disbursed before we fall into a recession.
This year will continue to be a seller’s market and represents an excellent opportunity for those who wish to acquire their first property or invest in a second home.
About the author: Jorge Ignacio Rodríguez-Suárez is a Real Estate Broker and Marketing Consultant at JIR Photo Design. He is a member of the National Association of Realtors (NAR) and the National Association of Hispanic Real Estate Professionals (NAHREP). If you have any questions or concerns, contact firstname.lastname@example.org or visit www.jrsrealestatepr.