Posted on August 26, 2021
Low and No Maintenance Homes Is a Hot Commodity
United States real estate is presently experiencing rapid growth. Recent numbers have shown an increase in new homes built, construction costs, and total land area. Many factors contribute to this. However, one man who seems to be a central component of this growth is Justin Montoya.
Justin Montoya is an entrepreneur who promotes private commercial real estate. The real estate industry is not something new. Private commercial real estate has been around for a long time, even before the creation of the mortgage and credit markets. Private commercial real estate is a relatively unregulated industry. Private real estate lenders are not held to the same strict lending guidelines as traditional real estate lenders. In other words, there is a lot of room for profit in this market.
In just the last two years we have seen a significant increase in the number of new properties coming onto the market. The industry is experiencing a net loss at this time due to the economic recession. The number of lenders offering mortgage financing has been reduced dramatically, and there are fewer properties available to buy. As a result, real estate values are still increasing.
The real estate industry is currently undergoing a number of changes, both positive and negative. The market penetration for private commercial real estate loans is increasing, which is creating a greater marketplace. One of the negative elements of this market is less lending to individuals and couples with poor credit ratings. As more properties come on the market, this will also affect the market penetration of the industry. Lenders have become increasingly leery of lending money to these types of borrowers.
Real estate professionals have noticed that the cost of residential real estate in some markets has actually increased over the last year. This is having a significant effect on the economy of the area in which the property is located. In many parts of the country, the cost of living is simply too high to attract buyers. In other areas, the real estate market is simply not robust enough to support this kind of rapid increase in prices. As a result, inventory levels are at or near their maximum levels.
Private commercial real estate investors can take advantage of this low pricing trend. Commercial real estate investors make their money by purchasing properties for rental or to sell and then recouping some of their investment when they find a buyer for their units. Because commercial real estate investors typically purchase and sell multiple units, they are able to control prices in certain areas. Investors can buy an entire building if they so choose. They can also purchase individual units and rent them out to tenants. In either case, they can enjoy the advantages of buying low and selling high.
For real estate professionals, this is good news. Less lending means more income for real estate professionals, and this means more real estate for them to invest in. This is a good thing for everybody in the economy. The housing market should benefit as well as the real estate market as a whole. The economy will only benefit as long as people have enough money to spend and individuals and couples are able to afford homes.