With 2020 looming, the real estate world is anxious to see if the future carries better prospects or if the things will remain the same. To answer that question, here are the top 4 trends that will be dominant throughout the following year.
Technology will continue its integration
Technology has seeped through all pores of our lives and industries and real estate is no stranger to its influence as well. In the sphere of residential real estate, well-to-do families request smart home devices and eco-friendly solutions while commercial real estate buyers are all about saving money on electricity via technology. Different software solutions play a part in the business lives of renters because they allow them to make a database of applicants, monitor when the rent is due, as well as check their tenants’ credit score.
However, the biggest change that has become unavoidable is the appearance of the iBuyer. iBuyers are companies that purchase properties directly from the buyer and to sell them afterward. Original sellers love the idea of not having to clean, market or stage the house or even to organize or be present for showings. How it goes is that the iBuyer presents the seller with a cash offer, which if accepted, is given to the seller in a couple of weeks or days, depending on the agreement. However, since the iBuyers must earn as well, they can’t offer sellers full market price which means sellers usually get less than via traditional methods. It remains to be seen whether the entire real estate community will get on board.
Suburbs are making a comeback
Having become working adults and started their own families, the Millennials have become the primary buyers in the real estate market. All around the world, in the USA, Australia, Europe, they are opting for smaller cities where the living costs are lower and where they can raise their children without the bustle and crowd of a big city. For instance, Australian-based Millennials increasingly choose to hire Orange real estate agents to find them a home that’s close to schools, hospitals but also in a peaceful neighborhood.
Besides this shift towards small cities, what we are also witnessing is their increased interest in the suburbs. For those who cannot afford to live in big cities, this seems like an excellent solution because they get to live close enough so they can be a part of what’s happening but distant enough they can lead a more slow-paced life. This means that, in terms of real estate, buyers and sellers are taking a break from large cities whose real estate prices skyrocketed during the last period and focusing on smaller cities and the suburbs.
Increased demand for the interconnectedness
As technology developed, people started traveling more and in general being more mobile. In what now seems like a distant past, people used to limit themselves to finding a position near the place they lived because it took them a long time to get to work. However, nowadays our lifestyles are fast-paced, and people don’t refrain from choosing a post on the opposite side of the city or even in another country. What this means, in practical terms, is that the neighborhoods which offer better connection regarding transportation will rise in popularity.
This not only includes public transport which is often less frequent in neighborhoods that were built recently but also special lanes so that people can go to the store or work via their bikes and electric scooters. This is because the ‘green’ movement has picked up the pace globally and people are invested in finding a manner to decrease their carbon footprint. This also includes finding alternatives to traveling alone by car to work and choosing to share a ride instead, go by bus, bike or simply on foot if the distance is not too big. You can expect for the up-and-coming neighborhoods to become those that are ‘green’.
High homeownership tenures as the next big hurdle
There are a lot of elements, such as socio-economic and political, that influence the real estate market on both the local and the global level. When searching for reasons behind a trend, it is not enough to just observe your city — you need to observe the changes that were set to motion by the government or world leaders.
What’s currently happening that, even though there are buyers, the sellers aren’t ready to leave the houses and this trend will continue throughout 2020. This is because the present market mortgage rates don’t offer many incentives in comparison to their existing low-interest mortgage rates and therefore, they see no reason to sell. The construction of new buildings and houses might solve this problem as there will be more properties on offer so that the high homeownership tenures will be a less relevant factor.
Those who are truly passionate about real estate won’t abandon that world and its exciting prospects for any reason. Those people think of everything as a challenge and emerging trends, regardless of whether they are considered generally negative or positive, are not a reason for concern. However, those experienced real estate wolves need to learn about the trends for the following year, just as much as a novice, so they can prepare for what’s coming and ultimately excel at what they do. Millennials are shifting the focus to quiet but well-connected neighborhoods which is something to keep in mind, together with limited housing inventory due to sellers not putting their homes for sale. The scope of iBuyer’s impact on the real estate market is yet to be seen but it is safe to say that 2020 will be an exciting year.