Prospective real estate investors don’t have to feel priced out of the current market when there’s other ways to get exposure to the sector—one of which is the FlexShares Global Quality Real Estate Index Fund (GQRE).
Even with record-low interest rates, the current seller’s market makes it a competitive market for would-be homeowners. According to a recent CNBC article, it’s gotten so competitive that some are simply giving up.
“Pending sales have seesawed since January, indicating a turning point for the market,” said Lawrence Yun, Realtors’ chief economist. “Buyers are still interested and want to own a home, but record-high home prices are causing some to retreat.”
According to data from the S&P Case-Shiller national home price index, home prices in May rocketed upwards to 17% versus last year’s prices. As far as June goes, the data could very well exceed that number, especially given the low supply and number of buyers looking to get into a home.
Even with mortgage rates at historical lows, it’s still the seller coming out on top in the current market environment.
“With prices at record highs and mortgage rates still hovering near record lows, sellers are recognizing the favorable conditions,” said George Ratiu, senior economist at Realtor.com.
GQRE seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Global Quality Real Estate Index. The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to quality, value, and momentum factors relative to the Northern Trust Global Real Estate Index.
A Global Approach to Real Estate
Getting global exposure to real estate means investors get all the benefits of real estate with the international diversification component. With real estate prices rising, investors can get also get an inflation hedge in addition to the income aspect of real estate investing without the headaches of being a landlord.
“Investors seek out real estate investments for many reasons, including as potential protection against long-term inflation and as alternative sources of potential portfolio income,” a FlexShares Fund Focus article said. “But we believe the full benefits of these investments can be better captured through a broad-based global approach that includes well-established real estate markets in developed countries around the world. Expanding an investment perspective to include these global opportunities may help investors more effectively meet their objectives.”
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