The real estate market has fluctuated and changed considerably over the years, yet it still proves its resilience. The US housing market is worth over $33 trillion right now and has grown by 50% over the recent years. The homeownership rate has increased by 2.6% over the last quarter with 67.9% of Americans owning a home.
As the real estate market oscillates with the economy’s current, new advancements and developments will undoubtedly change the way realtors sell and how people buy and invest in a new property. Statistics show that 50% of people buy their homes online and 93% of people younger than 36 years will do an internet search before consulting with a real estate agent. Additionally, the demographics are changing with the Millennial generation taking the lead as one the fastest growing home buyers right now.
Keeping an eye on the sustainability of growth on key aspects like population/demographics, economy, and the digital and online world will help you stay up to date with current trends in the real estate market, especially if you are a realtor, real estate investor, or starting a business as one. This article will discuss what to expect in the real estate market for the new year ahead.
Focus on Space, Flexibility, and Wellness
It’s estimated the demand for more livable space, especially in suburbs, will grow to allow people to do more inside and outside their homes; the purchase of more single-family rentals is predicted to increase. Additionally, the need for more outdoor recreational facilities like parks and bigger gardens.
More office spaces, and generally any workspace or environment will become wellness-focused where workers can have a healthier experience with their surroundings, designed in a way that will facilitate wellness. Flexibility in renting an office space might increase too, namely, shorter rental periods that decrease the commitment and expenses, making it easier to manage office space.
Experience Vs. Inexperience
As demands increase for higher quality properties, so too will the need for more experienced realtors or brokers. Part-time agents, who constitute almost 50% of transactions, might fall short due to lack of experience while agents with more experience and know-how about facilitating transactions will be in demand.
Independent Brokers Vs. Larger Entities
Predictions about the sustainability and survival of smaller, independent brokers, indicate it will decrease unless it has secure financial support from either venture capitalists or corporations. Larger entities will have more access to high-end resources, especially as the digital age evolves and technology becomes more prominent in how real estate business is done.
Inflation and interest rates are likely to increase due to the Federal Reserve’s decision to increase inflation rates above 2%. The results of this decision will cause artificial suppression of interest rates on real estate debt, stabilizing and inflating current prices for assets. It is predicted that one of the impactful changes in the real estate market will be increased interest rates. With increased interest rates, above the current 2%, it will be challenging to obtain financial aid to purchase a property.
New Opportunities in Real Estate Investment
New opportunities in real estate investment will open in the multifamily area. As the demand increases for more multi-bedroom apartments, specifically in suburbs, there will be more room for growth for real estate investment. Real estate investment offers various avenues to earn more money and start a new business.
Some of the primary real estate investment opportunities include wholesaling, buying and flipping houses, and buying and renting property. In each case, it will be necessary to have a good understanding of the local real estate market and what properties will offer returns on investment.
Choosing the right option will depend on the goals and needs of the business. Nagabhushanam ‘Bobby’ Peddi, the TRUiC CEO, says, ‘Whether you want to run a robotics company or a flower shop, come to us and we will help you on your journey’. Visit this website for more information about starting a real estate investment business.
Staying up to date with the real estate market’s changes will better prepare any realtor or investor for new business opportunities.