The real estate market has been one of the most volatile and unpredictable industries to invest in. However, specific trends continue to shape the real estate market and will likely continue to do so for some time.
We are entering a period of volatility in the real estate industry due to numerous factors, such as an increase in population and demand for housing. This means that we need to be prepared for any changes in this industry, especially if you’re planning on investing your money into it.
Here are some of the most common trends currently shaping the real estate market:
Shortages of single-family homes are a major trend in the real estate market
According to the United States Census Bureau, there is a shortage of 4.2 million housing units in the country. The shortage has been attributed to the fact that there is an increase in demand for housing units. This has led to an increase in prices for single-family homes.
This shortage will be caused by a combination of factors, including rising interest rates and stricter lending standards. In addition, the supply of single-family homes is expected to remain constrained by a lack of new construction projects in areas with high housing demand, such as California and Florida.
Increasing supply of condominiums
Condominiums have been experiencing higher demand over the past five years, mainly due to millennials moving out of their parent’s basements into their apartments and condos,often referred to as “starter homes,” after college graduation or early career advancement. This trend has been helped along by increasing interest rates and tighter lending standards that make it more challenging for first-time buyers to qualify for a mortgage loan from traditional lenders such as banks or credit unions.
Digital house hunting
According to the 2023 Boston real estate market report, digital house hunting is the new way to buy a home. Instead of going through the traditional process, you can do it yourself online. You can find a home you like, get preapproved for a mortgage, and start looking at homes in your area before visiting them. It’s easy, fast, and convenient.
Digital house hunting is revolutionizing the real estate market because it allows people to look at homes that they wouldn’t otherwise be able to see, thanks to the internet. This means more potential buyers can get into the market and put offers on properties that they normally wouldn’t have been able to afford with traditional methods of searching for homes.
Relocation from towns to suburbs
The coronavirus (COVID-19) outbreak has resulted in a significant rise in the number of people relocating from towns to suburbs. This trend is expected to continue, mainly because most people have embraced remote work where they can perform daily official duties from their homes.
High home prices
The housing market is heating up as the number of homes is increasing. The high cost of housing has pushed many millennials to rent instead of buying homes,and it’s not just financially constrained Millennial homeowners who are feeling the pressure. Millennials represent an estimated 40% of all renters in the U.S.
Trends in the real estate market are a key driver of real estate investment decisions. The following trends will influence real estate investment decisions over the next three to five years. These include an increase in residential home construction, particularly in the secondary market, where demand for new homes exceeds supply. Lower interest rates may spur more purchases of existing homes and could lead to more investment activity in rental properties.