2️⃣Liquidity Issues

One of the primary issues is the lack of liquidity in the real estate market compared to other asset classes, such as equities and bonds. Real estate transactions are often slow and inefficient, with complex processes and numerous intermediaries involved.

The National Association of Realtors (NAR) reports that the average time to close a real estate sale in the U.S. typically falls between 45 to 60 days. This timeframe reflects the period from the acceptance of an offer to the final closing of the sale. It’s important to note that this does not include the time required to find a buyer, which can vary widely depending on market conditions.

Moreover, traditional real estate investments are inflexible, as they do not offer mechanisms for fractional ownership, limiting investors’ ability to buy or sell partial stakes in a property. This rigidity is a notable drawback compared to other asset classes like stocks or bonds, where fractional ownership and trading flexibility are more readily available.