Real Estate as the most growing industry of tomorrow
Real estate has always been one of the most profitable fields in which to invest. With its past history to speak, it is the most growing industry of tomorrow. That certainly doesn’t mean that the real estate industry has not suffered during times of high interest rates as those in the late 1970s and early 1980s when mortgages were topping out at over 20 percent in some states, but the industry has always been able to return to its former status as a leader both for investing and as an employment source.
What makes the real estate less prone to downturns because of high interest rates? People always need a place to live, and in most cases, they can buy a house and pay less money than they can by renting. In addition, a home is an asset on which you can draw when you need some cash for a big purchase. There were times, however, when the housing market slowed, and homes did not increase in value as quickly as they had in prior years.
When interest rates are high, there will be less new homes purchased, and to compensate, sellers are willing to sell their homes for less. When there is a trend toward selling homes for less, it affects the entire industry, so home values experience a slow growth rate. It doesn’t mean the industry is depressed but rather that sellers are being choosy about how much they pay for homes when the interest rate is higher.
The good part about real estate is that as the interest rates go down, people will buy more expensive houses and thus push the price of homes up again. It’s a trend that has been continuing for years and will probably continue into the next century and beyond. The key to a thriving real estate market is to keep the interest rates low so that buyers will pay more for houses, but we know that is not a reality that is going to happen. It will not, however, affect real estate form fulfilling its projection of being the most growing industry of tomorrow.
How far has real estate come over the years? One has only to look at some of the homes and how they have skyrocketed in price. Homes that cost $10,000 in the early 60s are now selling for over $100,000 with only three bedrooms and no basement or laundry room. The biggest inflationary figure is in the land itself, which in some cases sells for over $10,000 an acre. All of these factors contribute to projections that real estate is the wave of the future, the most growing industry of the 21st century.
Each of us has seen how inflation has infected the prices of houses over the past few decades. It’s a trend that is going to continue into the 21st and probably the 22nd century when our great, great grandchildren are buying homes. The future of real estate is secure in both the commercial and residential industries, and it will be for centuries to come. We can be secure with the knowledge that real estate is the wave of the future, the most growing industry of tomorrow.