Most pundits are still confident in the real estate market according to research results as presented below. Further, a decline in home price increase and mortgage interest rates rise in 2018 are expected to be significant drivers for the US real estate market for homebuyers especially.
The changing of buyer preferences as well as the increase of new tech is expected to bring more alteration to the real estate market in 2020 and beyond. This list of property forecasts and trends globally will help you prepare for a real estate purchase you likely have lined up.
Prepare for Increased Real Estate Investments
The 2018 economic decline encouraged an increase in real estate investment in the United States, a prominent real estate trend. The increased investments injected about $470 billion into the real estate industry, an increase of almost 19 percent in capitalization. Further, the introduction of new real estate management tech is boosting property owner management capacity.
As you would expect, logistics is where most investors prefer investing in the real estate world, and remains a popular option for business people, despite pricing concerns. The trend should continue due to global industrial investment interest. If you are interested in the home construction niche, it would be a wise decision to invest in some of the top construction management software solutions to ensure your investment goes as planned.
Millennials Will be the Single, Biggest Homebuyer Group
Already, the millennials are dominating the real estate residential buyers’ market. Members of the generation have stable jobs and have household incomes of about $88,000. Besides, millennials prefer purchasing middle and upper-middle-class residences and are expected to take over 45 percent of the market.
To tap into this growing market, you must make effective use of the Internet. Millennials first carry out research online before they decide to purchase, and sellers should also offer sustainable properties with plenty of space.
According to the We Buy Houses team, you should consider investing in properties in low-cost but bustling cities. Buyers should expect improved communication with sellers, and they should be straightforward with what they would like in a home and enlist the services of a real estate professional.
A Move to Second-Tier Cities
Investors and buyers in the real estate market have for some time setting up shop in many second-tier cities due to high real estate prices in the first-tier markets. Investments in the second-tier cities are significantly driving up real estate prices, and larger companies are moving out of first-tier locations for second-tier cities. Such capital movements are resulting in economic growth as well as increased value for second-tier-city properties.
An influx of investments to second-tier locations should equalize capitalization rates in the markets, increasing the real estate value in the second-tier cities. The housing market growth is already stalling in cities like New York, Los Angeles, and Chicago.
Increased Mortgage Interest Rates
After years of remaining stagnant, mortgage interest rates are increasing and projected to continue doing so at a rate of 4.4 percent in 15-year mortgages as well as 5 percent for 30-year mortgages. To stabilize inflation and the economy, the US Federal Reserve increased the short-term interest rates temporarily – and higher interest rates mean that people are willing to borrow and spend.
Higher interest rates mean that home sellers should prepare early in anticipation of fewer offers. The higher the prices are, the more burden some buyers feel, causing them to postpone purchases. However, purchase cancellation is not the answer, and you can always use credit for the conventional 15-year fixed-rate mortgage.
Amenities Will Attract More Customers
Builders, landlords, and property owners are always looking out for ways they can capitalize on amenities to bring in new tenants. The typical gym and parking access are no longer considered important. Today, property owners are now compelled to offer unique amenities such as movie theaters, communal gardens, and smart homes.
The trends identified above should serve as a guide for home buyers and sellers. It is critical to identify those that have a direct effect on your activities since fund managers and investors are redefining their strategies to respond to the market changes or developments. If planning to buy a property, utilize data available from real estate market trends to ensure you get the most value.
Wendy Dessler is a super-connector who helps businesses find their audience online through outreach, partnerships, and networking. She frequently writes about the latest advancements in digital marketing and focuses her efforts on developing customized blogger outreach plans depending on the industry and competition.