Buying Real Estate

The housing market in the U.S. has experienced a major uptick over the past two years. Existing home sales are the strongest they’ve been since 2006. More than a decade after the worst housing crisis in U.S. history, it seems we’re finally in a sustainable recovery period.

The housing market shows no signs of slowing, and is slated to remain among the world’s top performers, according to a forecast from Fitch Ratings. U.S. home prices are expected to rise 4.6 percent this year. USA Today lists Georgia in the top 10 performers in the real-estate market. Commercial real estate, barring any major shocks, is following a similar track. Investment and leasing markets should remain broadly stable with the global economy in its best shape since the Great Recession.

Colliers International Chief Economist Andrew Nelson wrote, “Courtesy of the strengthening global economy, likely tax cut stimulus from Washington and other positive influences, the economy is getting new life.” Slow and steady growth is expected in office markets. Still, the sector will experience a balancing act of sorts as new supply levels converge with occupancy rates and asking rents. Vacancy rates nationwide have been stagnant for the past two years, standing relatively at the same rate, Colliers reports. The same can be said for rents the past several quarters.

In addition, suburban office markets are expected to continue to outperform downtown centers thanks to several years of positive absorption and vacancy rates.

Multifamily market- aggressive construction levels and apartment pipelines are putting downward pressure on occupancy rates and rents, Colliers reports. Some economists posit the new tax law will spur more demand in the multifamily market because the new system slashed some of the benefits of homeownership, making it less attractive and renting more likely.

The industrial real-estate market is expected to remain a star performer in the market as investors flock to the sector’s strong fundamentals and record-breaking occupancy and rents. Construction is booming as operators continue to tackle online delivery and push to get products to consumers more quickly by opening modern, multilevel distribution hubs in densely populated markets.

As real estate investors look for higher rewards, they are training their sights on previously beleaguered countries, second-tier cities and lesser neighborhoods in world hubs enter gentrification real estate. Real estate gentrification is beneficial especially to the newcomers of the community. Many features of gentrification are useful. Who wouldn’t want to see new investments and increased economic activity in their neighborhood?

Investors of course find real estate gentrification an effective strategy. They find in these neighborhoods higher investment potential, such as rapid increases in property values.  An investment property can be purchased cheap and rented out for income. In real estate gentrification, rents will go up and investors can produce double-digit returns. Longtime homeowners benefit from higher property values.

Gentrification is a neighborhood process that may contribute to the development of neighborhood collective efficacy, as gentrification is characterized by a rapid change in the social status and economic characteristics of a neighborhood as compared to the rest of the city. It can be understood as an in-migration of higher-socioeconomic status individuals into neighborhoods of lower socioeconomic status resulting in investments in the built environment, subsequent increases in property values and rents and is generally characterized by an upward transition in status, class, and income of neighborhood residents. In some instances, gentrification may also be the result of real estate or urban developments that result in increasing land values.

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