Growth in the IE for Real Estate Means Growth in Economy
The good news continues! The Inland Empire (IE) real estate market, residential as well as industrial, is stable and showing growth. Buying and selling homes and business in the IE stimulates another area that needed to continue its rise: employment. Now, unemployment in the IE dropped from 8.2% to 6.5% this year. There is an increase in non-farm employment of 47,300 in the past year (MSA) also. Employment rises in the past few years have been more than the increase in housing supply, creating a demand for more inventory on the market, especially in the lower to middle range. Increased employment also accounts for the activity in the industrial real estate markets. This is what we have been needing to keep our economy in check out here.
To get technical: “liquidity in the capital markets coupled with low interest rates bodes well” for the industrial market. Easily put, people having more money means that industrial as well as residential markets get more activity. The supply of new construction matches the rate of people buying new and lived-in homes, which is keeping vacancy levels and pricing relatively stable. With investors buying and flipping, the market is in a cycle of perpetual growth. We know it can’t grow forever, but there is still so much room that we can continue this cycle for many years positively. Eventually the market can balance itself out which will create a far more stable economy than we have seen since 2006 or so.
To add to all of the positives: Interest rates are currently still below 4% APR for a 30-year fixed mortgage, 15-year fixed, and a 5/1 adjustable rate mortgage. So what challenges await buyers? Home affordability and loan qualifying. Preparation is the key to qualifying for a loan. Buying a home isn’t something most people can wake up and decide to do that day. Well, they can decide to do it, but getting it done will take some time. Talking to a Realtor or Loan Agent are the best ways to get started on the process. Collecting your financial information is the best thing to do before you even approach someone that can help.
On the subject of home affordability, this is where a buyer’s opinion of what they want comes heavily into play. In this time of extravagance, we often don’t look at what we can afford realistically. If we go into “shopping” for a home with the things that we need in a home, not necessarily what we want in a home, we will have far more success with our first purchase. Of course there are those out there that are blessed with large income and great credit, but most people nowadays in the IE are not so fortunate. We should go out and take a look at what we can afford and not stray from that! Good luck to all of those who are trying to make a move to improve the quality of their lives and their living situation.