Nearly a decade after the real estate crisis, markets finally stabilized last year. Currently, experts are seeing some rising trends in the real estate industry. We will learn some of these from Zack Childress, a real estate entrepreneur and mentor.
Home prices are increasing
Home prices are increasing. The affordability factor of the average American is coming down. A realty research group which has been following home price trends closely, reports that,” about 3% of the 600 counties in United States have home prices that are unaffordable to the average earner and this may increase to 25% with greater inflation of home prices.” This rising pattern in home prices has doubled the home ownerships held by Americans and is leading to home-price stagnation.
Demand for smaller homes
More and more home constructors are creating small homes for entry level buyers who cannot afford bigger homes. Space constraints in cities and near them are also influencing the tiny home movement. There was a fall in the standard square footage rates for new homes this year, this being the first time it has ever happened since recession.
Cities are being replaced by amenity-rich suburbs
Since cities are becoming more populous and unaffordable in terms of home prices, the average man turns to suburbs for investing in homes. But these are not like the typical suburbs. People are looking for suburbs with city-like facilities – highways, bus and railway transport, grocery stores, dry cleaning, schools, eateries, sport-friendly parks, entertainment and others. Just as in cities these are expected to be easily accessible. A real estate consulting company expects nearly 80% of residential growth to occur in suburban communities over the next 10 years compared to just 15% for “urban” areas through 2025. This however results in polluting the clean and calm suburbs with traffic congestion, noise and others.
More people who are born between the early 1980’s and the late 1990’s will start buying first homes in 2017 according to the NAR (National association of realtors). Many of these buyers have saved enough to purchase a home bigger than a condo or a starting unit. They have paid off student loans and other debts.
Easy loans availability
Compared to the past 8 years, it is easier to take out a mortgage now. Factors like increase in interest rates are playing a vital role in influencing this trend. There has been a sway towards more banks wanting to offer loans to stabilize their business which is dulling down due to rise in interest rates. We can also see a loosening in loan-credit.
There will be the growth of a new generation that values home ownership. This will crop up at a time of higher job prospects and lower interest rates. The future generation say Z, unlike the previous which had hazards of recession, terrorism and war will effortlessly pay off student loans and other debts with their high salaries. A 17 year old interviewed by NAR said that she wanted to buy a home which had excellent conveniences – a room for each of her kids, master bedroom, movie room, swimming pool and so on.