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The ups and downs of the real estate market in 2016

Real estate is an adventure. Investors are often in for a bit of a roller coaster ride, especially in recent years. Some years are full of highs, with the roller coaster car reaching great heights. Others are filled with lows - with that car plunging so far and so fast you worry you may not be able to hold down that massive corn dog you wisely followed with a bag of cotton candy.

Fun as this adventure may be, wise investors survey the market and navigate through it carefully. Part of this survey involves a review of both the highs and lows of recent months. The most recent highs and lows were discussed in a piece by the Huffington Post. The piece, cleverly titled the State of the (Real Estate) Union, touched on both the real estate and rental markets. Here were some highlights:

  • Rentals are booming! Homeownership in the United States has dropped to a low of 63.5 percent. This is the lowest it's been since 1968. A number of reasons contribute to this dip, most notably the lack of available, reasonable financing options and starter homes. As a result, real estate developers are taking advantage of opportunities and building or renovating units for the rental market.
  • Investment properties are hot. Investors are also taking advantage of single-family homes that were run down during the recession. Investors can negotiate a good deal on purchasing these properties and make improvements, potentially providing an opening to take advantage of the next tip.
  • Opportunities for growth. The piece notes that there is a market for single-family homes, something that may not be available for buyers. As a result, in some areas it is wise to invest in single-family homes. This will be particularly true if the mortgage market shifts and better financing options become available.

As investors review the market and plan their investment strategies, it is important to keep in mind the potential legal ramifications of these transactions. An improperly drafted contract, title commitment or rental agreement can impede a successful transaction. As a result, it is wise to have an experienced real estate attorney review these documents and tailor them to meet your needs.

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