How to Calculate Vacancy Rate for Your Rental Property

Putting up a rental of any sort is a potentially profitable endeavor that nonetheless runs some risks. If you don’t have enough tenants, you won’t be generating as much income. That’s why it’s important to keep track of your property’s vacancy rates.

Using this information for your operations helps you increase your efficiency and get a good idea about your potential flow of income for the upcoming year. With a general idea of how much you’ll profit, you also get a sense of how much cash you can set aside for renovations, maintenance, and expendable funds. At Zumbly, we use a process of home scoring to rate the potential of residential properties. With our expertise in real estate calculation and analysis, here’s our guide to calculating vacancy rate.

Related: City Versus Suburb: Where Should You Live?

What is the vacancy rate?

In the real estate world, the term vacancy rate refers to the number of units in a rental property that are vacant at any given time. The vacancy rate gives the property manager a realistic understanding of how the property is doing compared to competing properties in the same geographic vicinity. Since the numbers don’t lie, this helps property managers who own multiple properties create campaigns for their poorest performing ones. This helps property managers with only a couple properties rethink their marketing and design strategies.

Sometimes vacancy rates have nothing to do with the property itself, but high vacancy rates may indicate an issue with the economy. A vacancy rate of lower than 4% is positive, while anything above 7% is negative. Low vacancy rates signify that people want to live in that area, and they are satisfied with the rents or services provided by the property. The vacancy rate is calculated by taking three types of units into account:

  • Vacant units that are ready to be rented
  • Units that have just become vacant 
  • Units under repair

Why does the vacancy rate matter?

empty room with closed curtains

Cash flow

The vacancy rate has a direct bearing on the stream of income flowing into the property manager or investor’s pockets. If a property has a high vacancy rate, it means the investor is not generating revenue from all of the units in their building. This can result in financial losses because regardless of the high vacancy rate, the property manager still has expenses associated with the building. After all, a high vacancy rate is directly responsible for negative cash flow.

Cap rate

The vacancy rate affects the capitalization rate of the property. The cap rate, as it’s commonly referred to, is the real return on investment that the investor is getting from the property based on the expected income. Areas with low vacancy rates offer higher cap rates to property managers. A reasonable cap rate in real estate is between four and ten percent or higher than that.

Occupancy rate

The occupancy rate is the number of occupied units in a multi-family or rental property compared to the total available units. Since this is the opposite of the vacancy rate, then that means a property with high occupancy rates is doing quite well.  

Related: How to Find Investment Properties

Steps for calculating vacancy rate

calculator on top of paper


Step one 

Identify the total number of units in the rental property. This number encompasses the number available units, those under repair, and those already occupied. 

Step two

Multiply the number of vacant units in the property by 100 and divide the subsequent result by the total number of units in the building.

Example

If the rental property has 200 units in total and out of this number, 80 units are vacant; the property manager needs to multiply the 80 units by 100 and then divide the result by the total number of units, which is 200.

80 x 100 = 8000

8000/200 = 40%, so the vacancy rate for this particular rental is 40%.

Formula for vacancy rate:

(Vacant units x 100) / Total units = % vacant

Average vacancy rates 

orange and grey apartment buildings


Average rates for short term rentals

Short term rentals tend to have slightly higher vacancy rates because people stay in them for a shorter period of time. Short term rentals can range from home share options like Airbnb to hotels and motels. These facilities tend to have an average vacancy rate above 25 percent, depending on the season. Since the cost of rent per day tends to be slightly higher for short-term rentals and most short-term rental property managers are using a passive income strategy, a slightly higher vacancy rate is nothing to be concerned about.

An increase in vacancy rates for short term rentals can occur when an area has a newly released long-term rental, which attracts a segment of your short-term customer base that might be looking for a permanent place to stay.

Average rates for single-family properties

The vacancy rates for single-family properties are low, with an average of 5%. This is because most people in that bracket are living in their own homes. They are also looking to start a family and need something stable. They have built their lives around the convenience of where they are living, and they can enjoy a particular lifestyle because of it.

Average rates for multifamily properties

The vacancy rates for multifamily properties are also low because they also need stability and are typically saving for their own single family property. They probably have kids in schools nearby and jobs that are close to their home. Also, these types of units appeal to people who prefer to have close neighbors and prefer to live in the center or near the city.

Related: How to Start a Airbnb Business

What factors affect vacancy rates?

urban city with lots of people

When it comes to vacancy rates, they vary from one place to another and are determined by factors like location, crime, schools, and other social and physical amenities.

Location

The more remote the area is, the higher the vacancy rates for rental properties. After all, renters are looking for convenience and proximity to amenities to determine where they want to live. 

Crime

An area with a high crime rate is not attractive to people looking to rent. It affects their quality of life since they and their loved ones can’t be safe even within their homes. 

Low income 

Low income affects people’s ability to rent spaces, and so they are either forced to move out or landlords have to kick them out because of lack of payment. It is challenging to sustain low vacancy rates, especially in low-income neighborhoods.

Poor infrastructure and lack of amenities

If there is inadequate infrastructure, like utilities, schools, or hospitals, then renters are not attracted to the area. It would not be able to meet their needs in case they fall ill or need to take their kids to school.

Competition

If the rental building is situated in a very competitive market and offers amenities that renters can’t afford to have in their building, then that can lower the vacancy rate. Renters are attracted to buildings with amenities like pools, daycare facilities, and some aspects of technology in terms of safety and utility.

Are you an investor? Find a well-located home for short-term rentals at Zumbly.

How to decrease vacancy rate

people gathering inside the apartment and sitting on a chair

 If the reason for high vacancy rates lies within the management of the building, then there are ways to reduce the rates.

Here are a couple of ways to do so:

  • Offer competitive rents in the same price bracket as competitors
  • Maintain the property by having repairs made in a timely fashion and keeping the premises clean
  • Maintain the exterior of the building
  • Provide basic amenities and advance ones to level up to the competition
  • Provide tenants with at least one paid utility like heat or water
  • Build rapport with the tenants by being approachable and available

Conclusion

Instead of looking at high vacancy rates as an end to a real estate investment, it should be an opportunity to improve services and relations with tenants in the future. With this positive change in mindset, it can help any investor or property manager to flourish in the real estate industry. But it all starts with the right properties. Get started with Zumbly for home scores and rental calculators to match you with the perfect short or long-term properties for you.
Related: What Happens When You Break a Lease

What to Include in a Short Term Rental Agreement

Thanks to the rise of platforms that encourage people to rent out their second homes to tourists, there’s been a sharp increase in people leasing their homes to tenants for a short period. When it comes to renting out a property, there needs to be a process to ensure that there is complete transparency, and the interest of both parties is safeguarded. In such cases, one has to draft a short-term rental agreement. But what should this include?

Related: The Easy Guide to Leasing and Renting

What is a short term rental agreement?

A short-term rental agreement is an agreement between a landlord/homeowner and a tenant. Also known as vacation rental agreement, this agreement allows property owners to lease their property to a tenant for a short period. The typical range is between 1 day to 30 days, but it can extend to as long as six months in most cases.

A short-term rental agreement lists all the responsibilities and duties of both the tenant and the property owner. These may include several details, such as amenities provided and rules based on local laws. A short-term rental agreement is typically done for higher-end vacation properties. The agreement must follow all applicable state laws, and if the housing structure was built before 1978, it must be furnished along with the Lead-Based Paint Disclosure Form.

Learn more about short-term rental agreement with Zumbly

Why do I need a short term rental agreement?

A house is a financial asset, and an important one, too. As a homeowner, you have to ensure that your asset is safeguarded in the hands of strangers. As mentioned earlier, a short-term rental agreement lists out all the responsibilities of the homeowner; this protects them from any false claims made by the tenant. It also lists out the duties that a tenant has to perform while staying in a particular property. For instance, the agreement will specify that the tenant cannot perform any illegal activities on the property along with any other restrictions that a landlord may choose to impose.

This ensures that the homeowner is free of any liabilities if something does go wrong. At the same time, it also spells out certain tenant rights such as the right to privacy, their stay duration, and the amenities that they have access to.

Learn more about short-term rental agreement with Zumbly

Things To Include In A Short-Term Rental Agreement

People holding a pen and discussing a contract


While the base of the short-term rental agreement is similar to that of other rental agreements, some details must be mentioned while drafting a short-term rental agreement.

The basic details that have to be mentioned are: 

  • Start and End Dates;
  • Rent ($);
  • Property Address (full description)
  • Amenities (Wifi, kitchen appliances, Cable TV, etc.);
  • Maximum Number (#) of Guests; and
  • House Rules

However, an excellent vacation rental agreement does not shy away from diving into the deep end. It’s best to keep the contract as detailed as possible to ensure that both parties are well-aware of all the terms and conditions. This also leaves little to no room for any miscommunication or misunderstandings.

related: Renting Versus Buying: The Ultimate Guide

Rental Property Details

The rental agreement has to mention all the details regarding the property. These details include the address, rooms, layout, guest capacity, different facilities that the guests have access to during their stay, etc. 

Amenities

In today’s vacation rental scenario, guests expect hotel-like services with vacation homes. In the rental agreement, one should specify the amenities provided at the property, as well as the ones that are not available. These typically include cleaning schedules, food/coffee, pick-up, and drop, etc.

Security Deposit Guidelines

Security deposits are collected by the property owner before the duration of the stay to pay for any damage caused during the rental period by the tenant. This amount is returned to the tenant after the stay if there is no damage to the property. One must refer to the state law to determine the maximum permissible security deposit amount.

Learn more about short-term rental agreement with Zumbly

Payment Guidelines

The most important aspect of a rental agreement is the rent itself. A contract should lay out the details of all payment-related information. This includes the lease, the payment method, the date of payment, etc. The general rule of thumb is to be as specific as possible.

For example, the agreement should specify the exact payment method, whether it’s cash or any other form. Similarly, it should also include any ‘late fees’ if the tenant fails to pay the rent on time. This avoids any hassle or misunderstandings during the payment period.

Tenant Contact Information

The rental agreement has to mention all the relevant contact information of the tenant. This includes name, contact number, address, email address, etc. A short-term rental agreement also states the exact amount of people allowed to stay on the property. It is best to include all their details in the rental agreement as well.

Tenant Obligations

Just as a tenant enjoys various rights during their stay, they are also obligated to perform several duties. For example, basic cleanliness, following the basic house rules, etc. The agreement should also mention various regulations regarding smoking, pet access, illegal activities, etc. It is a good idea to include all local laws, rules, and regulations in the agreement to ensure maximum transparency.

Related: Housing Hack: Live for Free with Airbnb Investment Property

Tenant Rights and Cancellation Terms

Since the short-term market is fast-moving, there is always the possibility of a cancellation. Therefore, the agreement should include all the rules and regulations about the event of a cancellation. This protects the interest of both parties and ensures that the tenant has the right to cancel and make the proper payment.

Find properties that are great for short-term rentals at Zumbly.

How binding is a short term rental agreement?

man in suit reach out to shake hands

A short-term rental agreement is just as binding as any other agreement as long as it honors the local, state, and federal laws. 

Learn more about short-term rental agreement with Zumbly

Conclusion

While it may seem unnecessary or a waste of time to draft a short-term rental agreement, it is well worth the time and effort for legal purposes. It protects both parties, ensures that everyone involved is being treated fairly and that there is a written understanding of all the services provided during the stay. By doing so, the tenant has a pleasant experience, and the homeowner is assured that their property is well taken care of. Now that you know more about short-term rental agreements, find the best properties to rent out with Zumbly’s home score and calculator.
Related: Apartment Investing 101

Strategies for Using Private Money Lenders for Property Investments

There are few safer bets in investing than real estate. When you know the fundamental tactics and strategies, a solid foundation in real estate can set the foundations for virtually any form of portfolio and investment strategy. 

While there’s a lot you can do with the money, saving it wisely can help you build a healthy investment strategy. Private money lending may be one of your best options. At Zumbly, we help you through the house-buying process with our home score algorithms and other real estate resources. Here, we’ll take a look at what private money lending is, how these deals take place, and who are the ones who can go for it.

Related: How to Make an Offer on a House

What is a Private Money Lender? How Do You Find Them?

business meeting with people collaborating

A private money lender is someone who loans money using a note and a bond of trust. Private money lenders are individuals or companies that are not related to any financial institutions (like banks) who lend money to help fund a real estate transaction. 

Private money lenders lend out cash in a scenario where the recipient either doesn’t qualify for a traditional loan or doesn’t have the time to wait for the loan approval to be processed. Private money lenders can often be found in your social or professional circles, and they can be divided into the following categories:

The Primary Circle (Friends and Family): Your family members and close friends form the first circle of private money lending. Since it’s easier to explain your situation to them, they’re more likely to lend you the money. 

Negotiating the terms beforehand is always advisable, even if you know your family well. This will help you avoid conflict. Friends and family may not be the most robust source of capital and you might feel guilty about borrowing them, so this tends to be more of a supplemental choice.

The Secondary Circle (Friends and Colleagues of Friends): When you know someone through a close friend or family member, it’s known as a secondary connection. This group of people can also serve as private money lenders. 

The bigger your primary circle, the bigger your secondary circle – hence, increasing the number of people who might be willing to lend you the money. However, since these aren’t your immediate connections, you’ll have to invest more time in convincing them to give you the money, such as through investment presentations, lunches, and so on. 

The Third-Party Circle (Investors You Don’t Know Yet): This circle consists of people you don’t know personally, which is why it can take longer for them to become your capital partners, despite this being the capital pool that’s the biggest among the three. 

You can do this in two simple ways. You can either go to a website that provides you with contacts of investors or get in touch with a list broker. The latter can help you come up with a few names that could be your potential investors based on specific criteria such as net worth, willingness to invest, etc.

Related: Mezzanine Loans: Everything You Need to Know

Strategies for Private Money Lending

people discussing, holding pen and paper

When opting for private money lending, there are specific tips to remember that will increase your chances of receiving the loan. Those tips are as follows:

Stay local

 Look for private money lenders that aren’t too far away. Explore the local marketplace and talk to the local experts. Your goal is to find a lender who gives primary importance to the investment side of the business and then the lending part of it. 

You might think that keeping all the options open is a wise move, but more often than not, it leads to you having to wait for a longer time to require the capital you need. This is why it’s vital to stay within your niche. If you want to borrow $50,000 from the lender, there’s no use looking at lenders who don’t lend anything less than a million dollars or so.

Get help with property investment and money lending with Zumbly

Have a short speech prepared

This speech should enlist what you need the money for, and how you plan on paying it back. Clear statements often help in closing deals. 

Attend events and look up people who have achieved success in the area of getting money from private money lenders. The more people you talk to, the more confidence you’ll have in your strategy. 

If you’re trying to secure lenders from the first circle, try to ensure that these are people with whom you have a consistent relationship. You want to avoid personal and financial conflict mixing.

Get help with property investment by checking out Zumbly’s home score algorithms.

The Structure of Private Money Deals

Private money deals often have the same structure as a bank loan, where the lender lends the money and the borrower agrees to pay it back with interest and within a given schedule. The duration of these loans is usually five years or less and consists of balloon payments. 

Private money loans can, at times, be used in addition to a primary bank loan to cover the costs related to a down payment. In that case, your private money lender should understand his/her role as a second mortgage holder. 

Regardless of the path you choose, paperwork needs to be involved in protecting the assets of both parties. All of this is done in the presence of an attorney to ensure that both parties agree with what’s on the contract.

Related: What is Short sale

When Can You Use Private Money?

coin in jar with money stacked up in a row

Although an individual can finance real estate investments in several ways, private money lending is often the best option to consider. A few of those situations are:

Get help with property investment and money lending with Zumbly

Immediate Financing

Real estate is all about grabbing the property that you have your eyes on as soon as possible. In case you can’t gather the money on time, you end up losing the property you liked in the first place. Private money lending helps in this case with its speed and efficiency. After getting the funds from a private money lender, you can quickly close the deal before you run out of time.

Get help with property investment and money lending with Zumbly

Poor Credit

Banks and other financial institutions may be apprehensive about working with someone with a bad credit score. However, with a private money lender, you don’t have to fret about the traditional guidelines and requirements related to your credit history. Even if your credit score is below average, a private money lender may still loan you money if you demonstrate reliability.

Find your next property with the help of Zumbly.

Requirement of Cash

Sellers are often inclined towards cash offers, and if you go for private money lending, you can choose to offer cash, which is particularly useful if you’re aiming to acquire bargain deals or distressed property. This hard cash enables you to win bids and also increase your down payment, which saves you from having to pay a higher price.

Related: What is Due Diligence in Real Estate

Final Note

Private money lenders can help non-traditional home buyers and prospective buyers who need to fund their purchase quickly. So what do you need to do? First, start thinking about whether or not the best lender for you is in your primary or secondary circle, or if you need to consider a lender from the third-party circle. Check out homes using Zumbly’s home score rating. With the right lender and confidence in the home you want to buy, you’re good to go.

Housing Market Predictions for the Next 5 Years

As the years go by, people seek out new investment avenues. One of the strongest contenders for the best investment opportunity in the next five years is the housing market. Believe it or not, but a resilient job market and low mortgage rates are expected to sustain and strengthen the real estate market in 2020 and the following years.

The unemployment rate has reached its lowest mark in the last 50 years and interest rates are lower than they have been in the past, incentivizing prospective buyers. One of the problems faced by the real estate industry is the scarcity of housing, especially at the lower end of the pricing spectrum. Despite market struggles caused by rising mortgage rates and stock market volatility, sales have improved since 2019.

Investing in the real estate market can be tricky and expensive. But at Zumbly, we’re here to provide you with the resources you need to navigate this challenging endeavor. Here are some trends to know in market prices, rates, and investment strategies.

Related: How to Make an Offer On a House

Trends in Market Prices and Rates

arrow success trend
  • According to GSE, the home price growth is expected to experience a slowdown over the next few years from an annual growth rate of 3.2% in 2019 to 2.9% in 2020 and 2.1% in 2021. 
  • Sales of new homes are expected to rise to 750,000 in 2020, which will be a record high in the past 13 years. However, existing-home sales will continue to suffer from the lack of supply and will rise only to 5.6 million sales, which is just a 4% increase over one year. 
  • According to Lawrence Yun, the Chief Economist of NAR, an increase in home-building activities and the resulting growth in housing supply are expected to keep the home price gains under control. This is a promising development for home buyers, especially those buying a home for the first time. It is expected that the market in southern US cities will perform better than the other markets.

Related: Need to Know When Buying Your First House

Trends in Investment Strategies

puzzle money in pieces
  • Sales of homes amounted to approximately 6 million in 2019 and are expected to rise in 2020 and 2021, to 6.1 million and 6.2 million, respectively. 

Stay in tune with the housing market by using Zumbly home scores.

How can I prepare for these trends?

house key in the doorknob

To properly understand how to use the real estate market trends to your advantage, their impact must be fully understood. For instance, if the market is fluctuating, then investors should take a loan on a floating basis instead of a fixed basis. Also, understanding the economic conditions and their impact on individuals can be crucial in preventing a financial misstep – such as if a recession is expected, then taking a loan is not a good bet.

It is essential to carry out extensive research into the market and how it works. For instance, be aware of government programs that could benefit home buyers substantially, such a first-time homebuyer programs that offer a significantly lower mortgage rate or down payment. Similarly, there are real estate crowdsourcing opportunities in the market that potential investors could look into, without the hassle of tying up one’s liquidity in a physical real estate. 

Most importantly, do your research about the properties you hope to buy. With Zumbly, you can narrow down your search to find cash flow positive homes only or even homes with a specific return rate. You can narrow your search by GRM or year built, so you can focus on ewer or older homes depending on what the market is like. You can also search by Airbnb occupancy rate to make sure your short-term rental property purchases are in lucrative areas.

After studying the above opportunities, it is not difficult to read between the lines and make an investment decision. 

Conclusion

The predicted trends for the upcoming years show that the real estate market is unlikely to crash in the near foreseeable future. The year 2020 is shaping up to be a great time for real estate buyers to enter the market arena, as there are currently little or no signs of any imbalances that could force their hand to either hurry or pull back. 

The overall forecast for the US housing market predicts that the total stock of homes available for sale will remain more or less stable.  Additionally, even though it may be a seller’s market in more places than not, it is expected that there will be less competition for buyers to face. Homes in most cities might take a more extended period to sell as well, and price deductions will now become more common in the US real estate industry. 

Related: Is Buying a House Without a Realtor a Good Idea?

When Will it Be a Buyers’ Market?

The real-estate market tends to dictate the health of the overall economy. With 2020 just begun, everyone is waiting to see what the new year will bring forth in terms of real estate trends. One of the main factors that investors consider is the ‘status quo’ between buyers and sellers.

This status quo is known as either a ‘buyer’s market’ or as a ‘seller’s market.’ So what will 2020 and beyond bring? Using our superior forecasting skills at Zumbly, we’ll give you the answer to this question.

Related: How to Make an Offer on a House

What is a buyer’s market?

Simply put, it is a buyer’s market when there’s more supply than demand. When it is a buyer’s market, the typical scenario is that homes have been listed for a long time, without a sale taking place. This encourages sellers to sell their properties at lower prices. Therefore, if it is a buyer’s market, buyers get a great deal when they purchase a new property.

Know more about buying a house from Zumbly

What is the market like now?

As of fall 2019, all the indicators signaled a shift from a seller’s market to a buyer’s market. The typical sentiment among buyers is patience and perseverance. Despite lower mortgage rates, most buyers are willing to take their time making a decision. This has led to more and more houses being put on the market with fewer buyers ready to make a decision. 

According to CNBC, “Just more than 10% of offers written by Redfin in August faced a bidding war, according to the brokerage’s monthly survey. That is down from 42% a year ago.” If this were a peak seller’s market, the percentage of bidding wars would be much higher. Statistics like these signal a shift from the seller’s market to a buyer’s market.

Know more about buying a house from Zumbly

Will 2020 be a buyer’s market? 

gray painted house in front lawn

This brings us to the current year of 2020, which indicates the beginning of a buyer’s market. Many statistics lead to this shift; it portrays the current scenario in the housing market and the parameters that determine the status quo.

Related: What You Need to Know When Buying Your First Home

The Number Of Houses On Sale

For these past years, the number of houses on sale has been consistently dropping. “For the past several years, home sellers held all the cards at the negotiating table, fielding multiple offers while buyers faced stiff competition and a fast-moving market,” said economist Aaron Terrazas. One of the most significant indicators of a buyer’s market is this number being stabilized instead of increasing in 2019. There has been a slowdown in the home inventory in 2019, which clearly signals a strong shift towards the buyer’s market in 2020.

Find out which house you should buy according to your investment strategy by using Zumbly.

Home-Value Appreciation

Seller’s have always had the upper hand in the real estate market for a while now, the reason behind this lies in the steady appreciation of home-value. The value has been on the rise since 2017 and 2018. However, growth is slowing down. Home-value growth is slowing in more than half of the nation’s 35 largest metros, and price cuts are becoming more common. 

Does This Mean It is A Buyer’s Market in 2020?

blue house light turn on

While all the signs signal a shift, the market is very much a seller’s market, at least in most cases. Even with slow appreciation, the sellers still hold dominance in the market, specifically in the affordable housing sector. It’s important to remember that no two housing markets are the same. Many experts believe that the Midwest will enter the buyer’s market before the rest of the country. 3/4 economists surveyed estimate that the national housing market won’t shift to a buyers market until 2020 or later.

While all of these trends do signify the beginning of a buyer’s market, it will most likely be towards the end of 2020, rather than the beginning. Sellers still have an upper hand because of rising home costs and despite lower mortgage amounts. 2020 will be a transitional phase between a seller’s market and a buyer’s market, with the possibility of it swinging either way (although not completely). Many factors play into the status quo, and these factors are constantly changing because they’re often controlled by external elements such as tariffs and trade wars. 

Related: Buying a house, What You Need to Know

Predictions for 2020 and beyond

Among experts, the largest share (43 percent) said the national housing market would shift decidedly to a buyers market in 2020, followed by 18 percent that said it would shift in 2021. Experts believe that the housing market will see a dip in growth in the coming years. From 4.2 percent in 2019 to below 3 percent from 2020 to 2022. 

According to The Washington Post, “New-home sales are expected to rise to 750,000, an 11 percent increase that puts them at a 13-year high. Existing-home sales will continue to be held down by lack of supply, rising modestly to 5.6 million, a 4 percent increase. The national median sale price of an existing home is expected to grow to $270,400, an increase of 4.3 percent from 2019.”

According to Realtor.com, Tight inventory and rising mortgage rates will lead to dropping sales, and the stock will remain constrained, especially at the entry-level price segment. 

Both these reports signal both increased sale prices and a slight upper hand for buyers due to inventory constraints.

What does this mean for my investing strategies?

light beige house on front lawn

As an investor, it is essential to analyze the health of the real estate market. Many Millenials have entered the housing market or will enter the housing market in 2020, which means that there will be considerable demand in this sector. 

Therefore, it is vital to understand the detailed dynamics of the local housing market. There has always been a seller-dominated market, and while the trend won’t change drastically, it will be shifting to favor the buyers. “While ongoing supply constraints are reinforcing the floor on home prices right now, the experts’ forecasts still imply the joists will start to crack sometime next year, and result in sub-three percent annual home-value appreciation in 2020 and beyond,” said Pulsenomics® Founder Terry Loebs

Therefore, as an investment, the housing market will be a strong bet in 2020. 

Know more about buying a house from Zumbly

Conclusion

2020 will be a transitional year for the real estate market. With experts predicting a buyers market in either 2020 or 2021, the signs point to a mixed market. The implications for you depend on your state and local real estate market.  

Whether it is a buyer’s market or a seller’s market in 2020, the opportunistic real estate investor has plenty of opportunities to make the most out of this transitional year.
Related: How Long Does it Take to Buy a House?