With all the talk about increasing interest rates, many buyers are asking if it’s still a good time to invest in real estate. The short answer is always yes. Real estate is one of the most sound investments you can make, especially in the Bay Area where homes are always valued.
Here are three reasons why real estate is a good investment in 2022:
- Portfolio Diversification
- Home Values Tend To Rise
- Reliable Long-Term Investments
1. Portfolio Diversification
Diversifying your portfolio is a good way to hedge against risk. Let’s say you have all your investments in fuel stocks. The industry takes a huge hit, and your net worth plummets. In contrast, let’s say that you spread your risk by investing in fuel stocks, computer company stocks, and airline technology stocks. Even if the fuel industry were to experience a major downturn, the computer and airline technology stocks likely would continue performing well. Another way to diversify your portfolio is to invest your money in different asset categories altogether. Instead of just investing in stocks, you could also invest in real estate. By investing in different asset classes, you’ll likely be more protected when markets move as a whole. The real estate market typically moves independently of the stock market. Even if the stock market were to experience some volatility, your portfolio could continue performing relatively well due to the steady growth of your real estate investments.
2. Home Values Tend To Rise
Of course, real estate investing is not completely risk-free. Any type of investment comes with some risk, and due diligence is a large part of mitigating it. According to CNBC, U.S. home prices increased 48.55 percent over the last decade. Despite temporary ebbs and flows in the market, home values have risen over time.
3. Reliable Long-Term Investments
Real estate lends itself as a reliable long-term investment, and you could earn some significant wealth if you expand your real estate portfolio over time. You could own several passive income properties, or double down on your REIT investments. Regardless of which avenue you choose, real estate can provide you with significant rewards over the long haul.
Ready to work with a skilled East Bay Area Realtor to diversify your portfolio and invest in real estate?
As a top producing agent with 20+ years of experience in the East Bay, I have helped hundreds of clients showcase and maximize the sale of their homes in the Greater San Francisco Bay Area and the counties of Alameda and Contra Costa, and my experience as a former appraiser allows me to help my clients understand the market. If you have any questions, I am here to be a resource for you.