How to Profit from the Housing Boom

    How to Profit from the Housing Boom

    In case you missed it, the United States is in the beginning stages of a housing boom. This makes it the perfect time to benefit from market success before everyone else jumps on the bandwagon. Let’s look at how this happened and what you can do to take advantage of the opportunities available.

    Some Housing History

    At the turn of the century flipping houses was big business. House flippers were living the good life. Flipping houses was considered one of the most profitable part-time jobs in the United States. There was a point where flippers were actually buying 10% of all the houses being sold. Many investors were juggling several properties at a time, all at different stages of the house flipping process. 

    Fast forward to 2008. The housing market suffered an epic crash and the average home lost a quarter of its value. All of a sudden investors, construction companies, and house flippers were stuck with properties that were no longer profitable. Some were forced to declare bankruptcy and many lost everything. It was such a devastating event that a large percentage of the players left the game for good.

    Millennials

    So how did we get back to a housing boom? It all comes down to supply and demand. Right now there is a shortage of homes for sale in the United States. People that suffered devastating losses in the housing crash got out of the business and those who witnessed the crash got scared to enter the business. Fewer homes have been built in the last 10 years than in any decade since the 1950s. 

    It’s not just the lack of homes being built that is causing the shortage. There’s another factor: Millennials. Millennials are the largest generation in U.S. history. If you thought Baby Boomers were a driving force in the economy, then get ready for the impact that millennials are making. The average millennial is 34 years old, which just happens to be the age when most people purchase their first home. 

    Put these factors together and you have the recipe for a major housing boom. We have fewer homes being built at the time when the largest generation in U.S. history is getting ready to buy their first home. It’s a seller’s dream. 

    Ways to Benefit

    The big question now is “How can you benefit from this information?” There are 3 different avenues that could prove lucrative during a housing market boom. Some involve more work than others but each can lead to a valuable return on your investment.

    Invest

    The easiest way to take advantage of the housing boom is to invest in companies related to the market. Don’t just think construction companies, although those are a good choice, but think outside the box to related industries. Forbes recently recommended 2 companies, Vulcan Materials (VMC) and Martin Marietta Materials (MLM), as wise investments. These are companies that sell concrete and gravel used in roads, sidewalks, and home foundations. 

    Flip

    If you are willing to put in a bit more work, you may see a more profitable return by flipping houses. House flipping is once again a viable means of making substantial money. This is especially true if you know how to do a large part of the work yourself. Homes flipped in the first quarter of 2019 sold at an average gross profit of $60,000. As the boom continues, profit growth can be expected.

    Property

    As the housing boom continues, more homes will be built requiring more land to build them on. Investing in property is a great idea at the moment. The longer you wait, the higher prices will go as the market becomes more attractive to builders. Investing in the right properties now could prove a smart move when developers come knocking. Be sure to pay attention to zoning details, which can either help or hinder you when selling your investment property.

    The Future is Bright

    With 1 in 3 homebuyers being millennials, and that number expected to rise even higher, the housing boom isn’t likely to end anytime soon. Don’t let the crash of 2008 scare you away from from the success you’ve been dreaming about. The housing market could be your ticket to financial success.

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    Alice Maxwell

    To know Alice Maxwell, Top Agent in Tuscaloosa AL, is quite frankly to love her. Vibrant and charming, she’s one of the region’s most successful REALTORS®. When asked about her sales, she sheepishly says, “Honestly, I’m not sure. I just take care of people. That’s what I love doing.” – Top Agent Magazine A Tuscaloosa Native, it’s this passion for people and knowledge of her hometown that has made Alice Maxwell a top REALTOR® in the Tuscaloosa area since 1993. She is quick to say, “I eat, sleep and breathe real estate. I love taking care of people!” It’s no surprise that clients quickly become lifelong friends, making her business one that is built on personal relationships, personal referrals and corporate relocations. By employing the latest technologies and marketing strategies, Alice does everything possible to ensure her clients’ properties are positioned and marketed for success. She and her team are committed to aggressively marketing their client’s listings, as well as finding the perfect home or condo for their buyers. To further assist her buyer’s need, she has a trusted network of professionals from inspectors, contractors, handymen to loan officers. Devoted to giving back to her community, Alice can often be found hammering at a new Habitat for Humanity house or feeding a group of students from Collegiate Recovery Community. She has served on the United Way Board, the Chamber of Commerce Board, and the Board of Directors for Capstone Bank, and as an Elder at First Presbyterian Church. She also serves her alma mater, The University of Alabama, as a member of the President’s Cabinet, Women of the Capstone, and Human Environmental Sciences Leadership Board. After earning her REALTOR® license, Alice earned her CRS, ABR and GRI designations. Since becoming a principal in Keller Williams Realty Tuscaloosa, she has participated in extensive training--recently completing Keller Williams’ signature training program, BOLD. Her knowledge of the industry paired with her knowledge of the Tuscaloosa market allows her to offer the highest level of service to each client. Because of her training and hard work, she has been named REALTOR® of the Year, and won the Arthur B. Pope award from the Tuscaloosa Association of Realtors. Alice is married to her high school sweetheart, John, and together they are parents of Anne, Davis and Stuart. In the spirit of the Maxwell tradition, all three children have pursued individual careers in different spheres of real estate. When not busy with real estate, Alice and Johnny are often found spending quality time with their five grandchildren, their dogs, close friends or Alice’s 89-year-old mother, Dee. It’s a full and busy life! Alice probably sums it up best saying, “If you had told me years ago that I would be where I am today, I wouldn’t have believed it. I just know that I work hard and I believe that people don’t care how much you know until they know how much you care.”

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