Today’s housing market is primed for sellers. While it’s important to understand the alarming trends in the housing market, SolidBlock also wants you to know that there are other ways to own property without giving up your whole fortune. SolidBlock has a solution to unlock the value of your investment after just one year. Ready to learn more?
The bad news
Zillow expects annual home value growth to continue to accelerate through the spring. Their prediction: housing prices will peak at 22% in May before gradually slowing to 17.8% by February 2023. Additionally, US home prices jumped an astounding 19.2% over the past 12 months, the biggest 12-month leap in recorded history.
The two main factors fueling this rise are easily tracked: a shortage in housing units, and rising inflation.
The average 30-year fixed mortgage rate in December 2021, says FRED, was 3.11%. That average rate is now up to 4.72%, and a $500,000 loan would equal a $2,599 monthly payment, an additional $166,106 over the course of 30 years.
Single-family home construction suffered a severe labor shortage that began well before the pandemic but was then exacerbated by it. Supply chain disruptions in the past year have pushed prices for building materials higher, and as pandemic-induced demand soars, prices for land increased as well.
It is not unusual for sellers to receive multiple offers on their homes, often even higher than the asking price.
All joking aside, these two factors have affected potential homeowners, too. One in three US renters can’t afford to buy a home where they want to live and 30% are unable to save for a down payment, according to a recent Redfin survey.
The US has a shortage of 6.8 million rental homes affordable and available to extremely low-income renters, whose household incomes are at or below the poverty guideline or 30% of their area median income. Only 37 affordable and available rental homes exist for every 100 extremely low-income renter households.
And the good news?
Hybrid and work-from-home options are allowing home buyers to buy in more rural areas where prices are less expensive than the major cities. But despite uncertainty from COVID and other risks, a growing economy will fuel demand for commercial office space and increase real estate investment across all property types, reports CBRE.
The average tax on single-family homes in the US in 2021 increased at the smallest pace in the last five years, rising 1.8 percent from $3,719 in 2020 to $3,785 last year. The latest figures resulted in an effective tax rate of 0.9 percent, down from 1.1 percent in 2020.
The even better news
Real estate is still considered an attractive and secure investment. It can generate ongoing passive income and become a good long-term investment if the value of your property increases over time. It can also be used as a part of an overall strategy to build wealth.
One of the key difficulties to consider when investing in real estate is the lack of liquidity. What this means is that if you take out a 30-year mortgage or become a limited partner in a commercial real estate deal, your money can be locked up in your project for up to 10 years.
SolidBlock is the leader in tokenized real estate, creating compliant, secure digital securities that you can trade like stocks.
When we talk about tokenization, we’re including the broader concept of the crypto space, everything from the trading of cryptocurrencies like Bitcoin and Ether to the creation of a decentralized banking system that relies on blockchain technology for peer-to-peer transactions that are secure, quick, paperless, and immutable.
Technological advancements have disrupted the way we engage in and see the world. Yet there is at least one traditional type of asset class that has yet to feel the effects of technology.
We’re talking about real estate, a $300 trillion dollar industry where most of the money is locked up in deals that don’t see a return on investments for up to 10 years.
Isn’t it time to break the cycle of traditional real estate transactions and make liquidity the number one goal in property deals?
Watch our video
SolidBlock has prepared a 15-minute training video to show you the following:
- How to reduce the capital lockup to just 1 year – at which point investors are 100% liquid, and can sell or hold their shares however they want.
- The #1 objection real estate sponsors hear when raising capital, and the simple tool that can be used to overcome this objection.
- The simple system that virtually eliminates the need to keep books and records of the shareholders of your SPV – even if they sell their shares to other buyers.
The World Economic Forum predicts that 10% of global GDP will be on blockchain by 2027. While Moore Global suggests “the tokenized real estate market could hit $1.4 Trillion within 5 years.”
It’s time to break with the current system and embrace the way of future investment.