Current trends in real estate include a mix of positive and negative developments. The market has been heavily affected by the Covid-19 pandemic that has created a new housing environment which is expected to alter the way we approach real estate for the next few years, and maybe beyond.
Here are the 10 key emerging real estate trends:
1. Increased Homeownership – Homeownership rates increased in 2020 and by 5% by the end of 2021.
2. Lower Interest Rates – Lower consumer spending during stay-at-home orders have resulted in lower interest rates, helping affordability ratios.
3. Steep Increase in Housing Prices – Real estate has entered a seller’s market that may increase inventory, slowing the pace.
4. Millennial Home Buying Strong – Millennials comprise 38% of the home buyers and seek mid-to-upper-middle class homes.
5. Affordable Homes Popular – 87% of the homes purchased were resale as millennials opted for homes needing TLC and updating over turnkey properties.
6. Shift to Second-Tier Cities – Real estate investors and buyers moved out of high-cost markets to second-tier cities and suburbs.
7. Technology Impact – Real estate professionals are using online home selling platforms, apps, social media, and smart home technology to enhance effectiveness.
8. Mortgage Interest Rates Expected to Settle – As the economy continues to grow, experts expect interest rates to rise and then settle.
9. More Demand for Luxury Homes – In the 3rd quarter of 2020, high-end home sales increased 60.7% year-over-year and this trend is expected to continue as more buyers prioritize an at-home lifestyle.
10. Smart Home Technology to Attract Tenants – Property managers are offering smart home technology in rental units to attract and retain tenants
The Covid-19 pandemic has left a strong effect on the US housing market. The next decade will be shaped by some of the trends explained here.