Everyone has heard about real estate, with many investors buying REITs or houses as long-term investments. Some of you might know about the housing market because of the 2008 recession. The return on capital is the main goal for real estate investors as property value goes up, or investors can buy real estate they feel is undervalued, renovate it, and sell it for a higher price. It is a bit complicated, but economists agree that the housing market is a handy indicator of our economy, and a necessary part too.
In 2020, the housing market exploded, partly due to the COVID-19 pandemic. With interest rates at 0.25 percent and mortgage rates at an all-time low, it makes borrowing money to pay for a house much easier. Mortgage applications have gone up by more than 30 percent, and millennials are the main ones taking advantage. One of the biggest areas to see a new spike in real estate prices is no surprise and already one of the most expensive places to live — Manhattan. That’s right, due to the current buying spree of properties going on across America, the already sky-high prices have reached new heights, truly a testament to the “sky-high” nature of the condos. This is because the median resale price for Manhattan apartments hit $999,000 in the second quarter — the highest on record according to a report from Douglas Elliman and Miller Samuel. What do you think about the real estate market? And are these skyrocketing justified?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.