Skyrocketing prices, an increasingly high demand and a decrease in supply, deterred many a potential home buyer from investing in real estate last year. The 2021 housing market continued to fluctuate until October, when it suddenly saw a 1.9% surge in existing home sales, making the 2022 predictions look rather promising.
There are various factors that contribute to the predictability of the real estate market, many of which can be seen foreseen months ahead. While the economy is, of course, the main factor behind the continuously shifting market, there are other players in the forever changing real estate game.
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Millennials Are Favoring Home Ownership Over Rentals
While many young people between the ages of 25 and 35 take to social media to express their frustration over the current housing market, millennials are actually the leading home buyers in the USA. Even though the mortgage rate has seen a 5.8% increase, at 45 %, millennials make up the largest segment of home buyers.
Although the U.S. economy has only seen a growth-spurt of 2% between 2017 and 2018, its population is starting to see the benefits of real estate investment – specifically the millennial generation. These percentages are directly linked to rising rental prices and the need to make an extra income. By 2017, an estimated 17% of the population below the age of 35 were ready to make the step towards home ownership.
According to M Patrick Carroll “Purchasing decisions and buying power are no longer defined by a set of random clichés anymore as they used to be, but thorough evaluation of many factors in the marketplace is needed.”
Avant-Garde Technology for Comfort and Efficiency
Although the real estate industry was one of the slower sectors to catch on to the advantages of modern technology, it is now offering all the perks of VR and data management applications. This makes shopping for the perfect house or property even more comfortable and efficient for buyers. Potential homes can now be toured from the comforts of any device via VR and 3D applications, which is particularly advantageous for those looking to buy long distance and are unable to waste time making several commutes for viewings.
Cloud and web-based data management applications have made the grueling paper-work process more time and cost-efficient. It has even made it possible for buyers to sign important documents with the use of their electronic signature, hence the closing process can be cut by a significant amount of time.
Suburbia is the New Place to Be
As is true for all industries, the real estate sector is heavily influenced by trend. With steep rental prices in the city, the latest trend for young singles and families alike is to flock towards the suburbs for tranquil living and affordable mortgages. Between 2010 and 2015, residential areas saw a growth of 71%, and one might suspect that the many green areas, limited traffic and sense of community are all motivators behind the decision to leave the city. It is estimated that, over the next ten years, a further influx of city-dwellers turned suburban home-owners will bring these numbers up to 80%.
Closely followed by Texas
While suburbia is the national dream, Texas is the next runner up in terms of the ideal location for real estate investments. San Antonio, in the heart of south-central Texas, is one of the most popular areas among home buyers, with Fort Worth and Dallas coming in at close seconds. Renters in Dallas pay the highest national price for a 3-bedroom home at about 0.80% of the purchasing price, making the shift toward home ownership a risky yet, mostly, profitable move. Real estate trends are forever changing with the economic seasons, however,with expert guidance and careful research, investing in a home could be the right move for anyone.
Read More: What Is Making Millennials Travel so Much?