Nothing we have ever experienced has affected the real estate industry the way the coronavirus will. Along with the challenges we face in our daily lives will come opportunities never before imagined. Successful real estate investors are staying in tune with the markets and making preparations for their next real estate deal. The greatest opportunities will come in the areas of short sales and foreclosures. The real estate investor who maps out a strategy for participating in the emerging real estate dynamic will realize unprecedented profits in the years ahead.
We learned from challenges presented during the economic upheaval of 2008 that with these challenges comes opportunity for those investors who are prepared to elevate their real estate portfolios to higher than imagined levels. We saw this happen a decade ago where homeowners and banks made monumental compromises in order to move housing inventory.
The opportunity in front of us now is much different from that one. The earlier situation was brought on in large part because real estate values had surged so quickly in certain markets that a bubble formed. When that bubble burst, holding times for real estate increased substantially; home values declined in most parts of the country, and plummeted in others. The markets that declined the most were those where prices had run up the most and the fastest. Miami was one of those markets.
That oversupply of housing took time to correct. Successful real estate investors developed strategies that prepared them to take advantage of the excess housing supply. The market eventually stabilized, values began to rise at a slower pace than before, and supply and demand found equilibrium.
Just when we were on a steady path of increasing home values, the coronavirus came along and gave us new challenges. When people are told to stay home, payrolls will contract. Uncertainty about future paychecks will keep the buyers out of the market and place pressure on homeowners as they struggle to make rent and mortgage payments. Going forward, a pattern of underemployment will emerge making homeownership harder to obtain and harder to hold on to. Loan defaults will eventually rise and there will be an abundance of distressed housing sales. Across the board, we anticipate that housing prices will decline for the unforeseen future.
A two trillion-dollar stimulus package recently passed by Congress, so the likelihood of a protracted recession in housing is not a certainty. Recent moves by the federal government and mortgage lenders across the country to grant forbearance for up to one year on mortgage payments for homeowners affected by the coronavirus will slow down the pace of loan defaults temporarily. The federal government is writing the rules for federally sponsored mortgage programs which account for roughly half the outstanding mortgages in the country. The half over which the feds have no control will not receive the same protection.
Waiting for foreclosures to be completed will require more patience in the short run, but eventually the courts will reopen and continue their processing. At the same time the foreclosure.com website is continually generating new opportunities in the live market of foreclosures and short sales.
As a real estate investor there are steps that can be taken right now to prepare for the opportunities that will come. This is a time when real estate investors can take stock of their strategies for real estate investing and accumulate the information needed to be successful going forward. Use this time to research properties and prepare yourself for when that happens.
We are in uncharted territory right now. The real estate investor who moves cautiously and prepares wisely for these challenges can realize great gains in the real estate investment market. To help you succeed, stay tuned to foreclosure.com for updated information and the latest listings of foreclosure and pre-foreclosure properties. Sign up for email alerts so you can have instant access to the latest deals, and read the updated expert advice on this website that can help guide you to success in real estate investing.