Experts expect two single factors – technology and the coronavirus pandemic – to alter the real estate industry throughout the world, particularly in the United States. These changes have introduced certain trends in this sector that are slowly becoming dominant. This article covers some of these emerging trends, thereby preparing you for what’s becoming the “norm” in this industry. The list also includes trends emerging because of the pre-pandemic economic downturn and the appearance of other home-buyer demographics in America. Many real estate gurus believe the following trends remain relevant today and will reshape the real estate industry even after everything starts to normalize. This is greatly influenced by many segments of real estate construction. For example, https://www.onestopflooring.com experts in flooring project a 4-5% growth in the global flooring market in 2023 alone.
- Online real estate services
People are already familiar with services like Zillow, but now online services don’t just display home-for-sale ads online; they buy it from you (such as Opendoor) and resell it to other customers. You may call them third-party buyers, as they make the reselling of a property much easier by eliminating all the hassle involved with the process. On the other hand, mobile closings eliminate paper-based documents for the buying or selling of a house, thereby introducing a virtual paper trail that’s more sustainable.
- Sustainability will become more important
Ever wonder why sustainability has become so crucial for real estate investors? It’s believed that the real estate sector alone is responsible for 40% of worldwide greenhouse emissions. It means that an investor in real estate must consider sustainability to engage in this sector for profit-making.
Distance learning has made it easier for aspiring real estate professionals to learn how to tackle several challenges facing the business right now and make it more sustainable. This also includes related businesses like construction and architecture. You can now easily pursue a sustainable real estate course to become more familiar with this industry’s role in climate change. This course enables professionals to reimagine a sustainable future, address business challenges, and teach them about real estate development and relevant tactics.
- People migrating from cities
It’s called an ‘urban exodus;’ homeowners are migrating from cities to reside in the suburbs. Suburban lifestyles are becoming more popular because of COVID and its impact on the real estate industry. Experts claim that over one-half of Americans moved in 2021 as urban homes lost their appeal. Furthermore, real estate gurus are afraid that metropolitan dwellings will remain unappealing for the next 3 to 5 years because of two simple reasons; the rich dislike living in tiny spaces, and the poor can’t afford big ones.
- The rental property market is expected to collapse
Rental properties are losing their popularity drastically, partially because of people leaving for suburbs out of cities and a collapsing housing market pundits. Financial advisors are warning investors about a falling rental real estate industry. More people in their twenties are now opting to live with their aging parents, and out-of-city migrations have increased apartment vacancies in some of the biggest cities in the USA.
- Millennials buying new homes
Unsurprisingly, millennials – despite being the most disadvantaged when it comes to affordability in 2022 – dominate as buyers in real estate. It’s estimated that 43% of American home buyers in 2022 are millennials, which changes how sellers should meet potential customers. With millennials as a dominant home-buying demographic, online real estate services are the perfect method to contact them and advertise. So, this trend necessitates the rise of technology in the real estate industry.
- The Sun Belt’s popularity
While Americans choose to move out of cities, they prefer to move to the suburbs in the Sun Belt. Southern suburban dwellings became popular mainly after WWII because, somehow, people preferred a sunny climate over a northern lifestyle. The growing popularity of the Sun Belt, therefore, favors the real estate industry in this area. Experts have their eyes set on cities, e.g., Dallas and Tampa, as the prime real estate locations for homeowners and real estate investors.
- Mortgage rates remain unpredictable
Many articles talking about real estate trends either predict a sudden decline in mortgage rates or a soaring increase. In October, Forbes wrote that the average 30-year mortgage rate, lying at 3% at the start of 2022, had risen to a whopping 7% in just ten months. But now economists are observing a decline in mortgage rates, indicating that inflation may be receding. If somehow mortgage rates restart to rise again in 2023, it’ll be bad news for both buyers and sellers. Affordability may become a problem for anyone planning to purchase a residence. This trend shall affect the real estate industry for many years.
- Home prices are getting higher
Infrequent increases in mortgage rates nullify the impact of sudden crashes, thereby making the housing market unaffordable for millennials. However, experts predict there’s a housing market collapse underway that may empower homeowners and future home-buyers. Some analysts have promised a 20% decline in home prices for 2023, which is bad for those who wish to move or sell their homes. Generally, when the housing market crashes, it benefits buyers while the sellers face more competition. But a crash, even if pending, isn’t 100% guaranteed.
- A demand for more single-family homes
We have discussed how more Americans are leaving cities for suburbs than ever before. It causes an increased demand for single-family homes in the Sun Belt. In 2022, Redfin recorded a four-year-high interest in single-family homes, and realtors projected home sales to grow by 10% in 2021. This growing demand for single-family homes is caused by several pre-COVID trends in real estate as well as low-interest rates noticed during the last two years. Many millennials are planning to begin a nuclear family and are either buying houses or having them constructed for their family plans.
- Luxury home listings increasing
In 2020, luxury homes became more popular than before, despite COVID looming over our heads. A decline was observed in luxury home listings in September 2022, but experts predict a comeback for these dwellings for the next year. In places such as Dubai, the luxury real estate industry seems to be performing exceptionally well. Even in the United States, an imminent housing market collapse can’t reduce the number of luxury home listings we expect to see in 2023. However, at present, even wealthy purchasers are cautious about buying opulent dwellings right now. So, we recommend you wait out 2022 for the housing market to stabilize and for reasonable home prices.
Millennials are this decade’s dominant demographic in real estate, and more people are moving to the suburbs from cities. Mortgage rates have shown a confusing unpredictability, and home prices have been going up since the pandemic. The Sun Belt seems to have grown in popularity, with single-family houses being more in-demand. Digital real estate services have modernized this industry, and sustainability has become a growing demand among customers. These trends will play a crucial role in shaping the property business in the coming years.