The real estate industry has ever since been one of the most statistically dynamic industries. Its sensitivity to economic factors mostly causes fluctuations in its market trend. But the market, prices, and listing remain relatively stable, making it a robust sector over the past years. However, when the pandemic hit the world in 2020, real estate is also one of the industries that faced some setbacks.
The demand of buyers dropped as the whole world struggled for survival. But a year into it, it began to get hold of the situation and started to fare up well again. The real estate market also evolved – for better and for worse. It was never the same as it was in the past years. And there is also so much to it that we can expect. So, we analyzed some of the trends and expectations that 2021 has opened up for the industry.
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Real Estate Trends to Know in 2022
Increasing Prices of Houses
Real estate prices are majorly affected by the shift in income. If we factor in the inflation rate and tax rates to pick up the economic slack, then we should expect skyrocketing house prices. In June 2021, the active listing price, according to Realtor.com, increased by about 12.7% over the last year. Although the figure is significantly lower than the previous months, the median price list forecast is uncertain, making real estate still less affordable. However, realtors are hopeful that the prices will stabilize until the next buying season as the static economy begins to lift.
This is one of the reasons why homeowners are nowadays downsizing and choosing to buy tiny homes to minimize financial waste and elevate the efficiency of their household. The increasing price is also partly due to the high demand and low supply of the real estate market. On a lighter note, it means that the home value is also growing. Therefore, it is beneficial to the current homeowners if they want to sell or refinance their property.
Competitive Demand for Housing
The rising home prices may have pushed some people to look into other housing options like house rentals. However, as housing interest rates cooled down during the pandemic, others are grabbing the opportunity to score a deal. The problem is the decrease in listing and inventory, so most homes still sold out faster. With the right strategy, this is also the best time to sell a house at the highest offer.
Presently, millennials are dominating the buyer market and are using reliable sources like the Kukun iHomeReport to gauge real estate prices and property value, in order to make better long-term investments. It is without prejudice to the anecdotal reference of them being the slowest generation to afford their first homes. But career growth, higher income opportunities, and paying off of their student loans propel the demands of this age group. Thus, the competition over limited listings will continue over the year.
The Trend on Online Selling
With millennials leading the market, they also cause a major shift in real estate selling. The norm right now is to make everything available at a click of a button. It altered the real estate agent’s job from traditional on-site tours to making the listing catchy while providing all information at a glance. Some buyers may even like the convenience of a virtual tour. Instead of providing information about the tangible properties of the house, agents’ work is basically reduced to negotiations and facilitating paperwork.
The buyer needs to be aware of all the steps throughout the transaction process and even work with a professional to ensure a smooth purchase with no hidden fees. Investment properties in platforms offer bigger opportunities than traditional selling. Online provides convenient access across various networks of resources with the best price offer possible. This revolutionary trend is expected to progress and keep abreast with technological advancement.
Demand for Home Offices
With telework slowly taking traditional office setups, home office spaces become attractive to buyers. The biggest cities logged an increased interest from buyers looking for small office spaces. With millions of jobs transported into the comfort of the bedroom, many are willing to take the trade. It means investing in homes with spare bedrooms that are conducive to the work-from-home setup.
Surprisingly, the trend is also geared towards self-storage facilities instead of multi-room houses. It becomes the new normal in remote working that is not expected to wither out soon. The storage units are convenient for all business needs. So gone are the days when storage units are the mere stockroom or warehouses. It also offers a temporary solution to work and business transitions. This trend blurs the lines between the property and its uses.
Migration to the Suburbs
Space and spacing problems in big cities have resulted in people choosing to relocate to the suburbs. With the convenience of a work-from-home setup, there is an expected exit of the population out of the city. It is likely because of the opportunity to build bigger and updated homes in the countryside. Rural real estate can afford homeowners the benefit of a yard and livable space.
Additionally, it is not just the millennials making an exodus from the urban setting. The older population also prefers rural living with its pristine environment, and maybe the viability of building a stairlift for the seniors.
The resurgence of town living splurges up during the pandemic, and the statistic is continuously increasing. Researchers are unsure whether it is just a reaction to the pandemic or a permanent real estate trend. But the living space and affordable rates drive the sense of lifestyle in potential home buyers. That is why the suburbs become an attractive location for scouting viable homes and properties and getting on with their moving checklist.
Real estate is still a lucrative industry with a dynamism that changes but will never waver. It can withstand recession as evidenced by the current scenario of the COVID-19 pandemic. Expectedly, there is a slight downturn for about a couple of years because of the economic downfall. But it is slowly rising back up to stabilize itself in the second quarter of 2021.
The new normal in real estate is perhaps its continuous progress. It has to keep abreast with technological advancement and meet the demands of the market. Now that the millennials are at a boon into property buying, the market gets nimble and more competitive. Despite the increasing prices, the mortgages are still low and may remain until the last half of 2021. Thus, this is still the best time for prospective buyers to negotiate their bids.
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