01 Jan Real Estate Economics – Property Investment
The Net Benefit of Real Estate Investors – $9 Billion!
A joint survey by Bigger Pockets and Memphis Invest revealed some fascinating insight into the attitudes of real estate investors and the impact of real estate economics on the well being of the US economy. They concluded in their 2014 report, that 28 million real estate investors have a $9 Billion+ effect on the economy. The survey results are displayed in the infographic below.
That real estate economics is a valid topic is timely and newsworthy because the housing market is stagnating, on the verge of a slump. The numbers in 2019 might be even higher. Add investment in new multi-unit rental property and commercial real estate and the numbers are astonishing. If money begins leaving the stock market and pours into the housing market, how will this affect your own best investment picks?
Investment: Stocks vs Real Property Assets
In the past ten years, investment has been focused on electronic technology and software and with that, the US economy hasn’t fared well. Housing is something that has always given life to the rest of the economy. It could be in 2019/2020, President Trump is holding this as his Trump card. If all else fails, he could turn to the most reliable generator of value and revenue — the housing market.
The spin off investment in furniture, appliances, home servicing, renovation, new school construction, new retail establishments, and more creates jobs in the US and further investment within the US. Is Donald Trump ready to capitalize on this basic and proven economic process? Quoted in a Bloomberg report, Robert Shiller says the US could be in for boomtimes and that means lots of new developments and higher home prices.
From Los Angeles to New York to San Francisco, a healthy housing market is likely to be okay, yet the government shutdown and Democrat opposition is increasing the worry about a recession.
Perhaps this is the signal we need to put more investment dollars into real property, whether for buying as an income property investment or in new homes to live in. This infographic offers some excellent insight into investor profiles, risk tolerance, rental price predictions, and more.
Trump: Responding to the Housing Crisis
It’s hard to argue that there is a housing crisis across the country. Even in Canada, with its limitless supply of land, there is a housing crisis too. So we know there is and was something very negative that has been suppressing investment in real estate in North America. The housing shortage hasn’t been addressed by the Trump administration, so we’re seeing a persistence about housing problems evident in previous government administrations. There is something deeper about the housing crisis, that extends well beyond the issues of affordability and into the real of international politics.
It’s still uncertain as to what he intends to do, and he probably hasn’t decided what to do. It will all play out in real time. Investors, governments, builders, renovators, realtors, and mortgage agents will have learn, react and plan on their feet. So, it’s an exciting time where everyone will have their values and understanding of the economy, housing market and real estate investment wisdom challenged.
There will be some big failures in the coming years too as Trump further drains the swamp. Old and young investors alike will find the new, clean swimming pond frighteningly responsive and hazardous with all-new predators and regulators. They all want a piece of the housing pie too.
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