Unemployment is high, home prices are rising, and economic uncertainty abounds, but apparently, real estate investors are still feeling optimistic.
According to a new survey from LendingHome, the majority of home flippers, landlords, and investment brokers aren’t too worried about the impacts of COVID-19 on their business. In fact, a whopping 80% say they think the pandemic’s impacts will be "short-lived." Overall, more than half said they’re feeling positive about their prospects.
What’s causing this optimism? And should you be looking upward, too? Here are four big reasons to feel good about the flipping industry right now:
1. Homebuyer demand is surging
Home purchases have seen a massive uptick in recent weeks. According to real estate brokerage Redfin, homebuying demand is actually 25% higher than pre-pandemic levels. Showing activity is also up, rising 21% nationally (and 23% in the South!). It’s the perfect opportunity for home flippers to turn a profit -- and hopefully start a few bidding wars.
2. Rates are low
Mortgage rates have never been this low -- and that’s not an exaggeration. Rates on 30-year loans sit at a mere 3.07%, according to Freddie Mac, and they’re even lower on shorter-term loans. If you’re planning to finance your fix-and-flips, those low rates can mean big savings while you own the home.
3. Remodeling activity is low
Remodeling activity has plummeted since the start of the pandemic. According to BuildFax, overall remodeling volume has dropped nearly 34%, while home-maintenance spending has dipped by more than 29%. Though that doesn’t have a direct impact on investors, it does mean contractors and remodeling suppliers are likely short on business. That could equate to serious savings on renovations, supplies, and labor when flipping a property.
4. You can socially distance easily
Finally, on a personal note, flipping is one business you can easily do while social distancing. Keep your team small, wear masks on site, and offer virtual tours and 3D walkthroughs instead of in-person showings. Demand for virtual tours has jumped exponentially in recent months, so you’re actually giving buyers what they want -- while keeping your team safe at the same time.
The bottom line
Things might feel a little uncertain right now, but if you’re in the house flipping business, there’s plenty to be optimistic about. And once you’re ready to offload that next property? Make sure to use these marketing tips to sell your flip at the highest price possible.