Real estate sector has its ups and down in the past year. While there are a lot of buyers, sellers and investors, in general, have earned profits from their respective transactions, there are also those who are on the other side of the fence. Well we can’t blame anyone for their loses and burnt capitals, they might not be ready for the risks in investing, or did not have enough knowledge to make the right buying and selling decisions. Well, let bygones be bygones for its another year, which means another opportunity to learn about real estate.
There’s only one question, what is the real estate trend for 2019? Certainly, we can’t predict where the entire real estate sector would go, there are those so-called experts give their fearless forecasts on emerging real estate trends. Patrick Sisson published an article in Curbed the top 10 emerging trends that will shape real estate in 2019. Browse the list below:
The 10 Top Emerging Trends That Will Shape Real Estate in 2019
The Urban Land Institute’s annual look at the year ahead focuses on technology and transformation at an uncertain moment
It’s complicated. In the course of compiling its annual Emerging Trends report, the Urban Land Institute found that the only certainty in its outlook for 2019 was uncertainty. Expert analysis points to a more complex, multi-layered series of overlapping trends, with unpredictable results, as opposed to a few strong narratives.
Will technology offer more opportunity and enhance competition and efficiency, or help consolidate the industry and drive out smaller players? How will shifts in demographics and shopping patterns challenge current investment practices? Will the U.S. ever get a grip on its housing affordability issues?
The report, a joint project of ULI and PricewaterhouseCoopers researchers unveiled during the group’s fall meeting in Boston, considered the responses of more than 750 real estate professionals in creating an high-level overview of the trends it believes will impact the real estate world. While the report expects an overall economic slowdown next year, emerging trends and markets in flux that could provide new opportunities.
Here are the broad trends and innovations expected to shape the real estate industry in 2019.
Grappling with a transformative moment
While vague, predicting a year of significant transformation only reflects the climate of uncertainty and possibility that’s recently settled over the market. In 2018, the homebuying market was expected to be the most competitive in history before buyers pumped the brakes later in the year. Curbed’s Jeff Andrews predicts prices will drop in west coast markets in early 2019.
After years of steady growth and low interest rates, many observers anticipate a correction, especially in the face new technology, generational and demographic changes, the rise of new markets, and the continued winding-down of traditional retail. One survey respondent described the feeling of “coming off a peak,” and others have said the “low-hanging fruit has been picked.”
One of the most far-reaching changes rewriting the way real estate professionals do business has been the rise of industry-specific technology, startups, and better and more transparent analytics. In many cases, capital is following fintech, or financial tech, leading to more efficient—and automated—transactions.
Tapering growth leads to a new numbers game
Less growth means a more challenging environment, and analysts predict a slow down on multiple fronts. Population growth has continued to trickle up, labor force availability, especially in the construction industry, is lackluster at best, and productivity figures for the economy at large show minuscule improvements. Add in government forecasts of an economic slowdown—Congressional Budget Office projections show average GDP growth of 1.9 percent in 2018-19, much slower than at the beginning of the current economic upswing—and real estate activity will likely taper off as well. This deceleration means identifying and capitalizing on new opportunities—such as emerging markets, replacing older buildings, adaptive reuse, and new office space—will be much harder.
Second cities, and now their suburbs, may be key markets
Investors have long seen urban revitalization in smaller U.S. cities as a great bet, but as these downtowns boom and millennials continue to return, young adults have started to make inroads into the suburbs. Researchers are seeing more evidence the younger generation that put off buying a home has its eyes on single-family homes, meaning that housing surrounding these so-called 18-hour cities—especially if it’s in walkable, transit-oriented developments—is in high demand.
Census Bureau stats show evidence of a second-city suburban shift. Over 2.6 million people annually moved from principal cities within metropolitan areas to the suburbs in 2016 and 2017, and of the smaller markets in the ULI’s Top 20 emerging market report, 55 percent of new residents over the last five years have relocated to suburban homes. The exodus from high-cost states such as California is helping to fuel this big demographic change. Read the full list here…
Those are the forecasts for some of the best people in the industry. The forecast did mention the rise of technology, demographics, and rise of new markets as a huge factor for the real estate market trends, they speak of the increasing number of millennials in the country. This fact has been true for a couple of years now. In fact, Melissa Allison wrote an article in Zillow Porchlight about the rising number of millennials being the catalyst to changes in the racially-divided market. You may find more information about it below:
Our Racially Divided Housing Market Is Changing, Thanks to Millennials
A look at how we got here and where we’re headed.
Kieran Killeen was astounded when he bought a home in Vermont in 2002, and its title barred minorities from living there unless they were servants.
They were empty words. Racial covenants are no longer legal.
But Killeen, who is white, did not like having even a defunct racist restriction on his home’s title. He worked with neighbors to have it removed from his and 121 other homes in South Burlington.
Such covenants were once encouraged by the government. The language on Killeen’s title matched that used by the Federal Housing Administration in the 1930s: “No persons of any race other than the white race shall use or occupy any building or any lot, except that this covenant shall not prevent occupancy by domestic servants of a different race domiciled with an owner or tenant.”
“It took 70 years to undo the paper trail of institutional racism,” Killeen noted.
Unfortunately, this is not just history.
Racial covenants and other practices from the housing market’s racist past carry forward in the form of segregated neighborhoods and diminished wealth. They laid the groundwork for the terrible financial toll that black and Hispanic communities, in particular, paid during the Great Recession. Even redlining, a common practice from decades ago in which lenders denied loans in minority communities, has made a bit of a comeback in the wake of the housing crisis.
Promising demographic trends could improve the outlook, but some say that’s not enough.
Millennials narrow the racial gap
For more than a century, there has been a persistent gap between white and minority homeownership rates. The most recent data show that 71 percent of whites own homes, compared with 41 percent of blacks, 45 percent of Hispanics and 58 percent of Asians, according to the U.S. Census Bureau’s American Community Survey.
The good news is that the youngest generation of homeowners — millennials — is more diverse. And they’re driving the housing market more than people realized, according to Zillow Group’s Consumer Housing Trends Report.
“While minorities remain underrepresented among homeowners, that is changing as a younger, more diverse set of buyers enters the market,” said Zillow Group Chief Marketing Officer Jeremy Wacksman.
In fact, half of all home buyers are under age 36. Although the housing market as a whole skews heavily white — with black, Latino and Asian homeowners each representing less than 10 percent of the market — there’s greater diversity among millennials in general, and among millennials who own homes.
Only 66 percent of millennial homeowners are white — much closer to whites’ 61 percent share of the general population.
It’s also encouraging that Latinos and Asians have begun to narrow the gap between their homeownership rates and that of whites. But the gap between whites and blacks has widened. Read the rest of the article here…
With the population of millennials and young people having the capabilities to buy and sell homes, they can contribute as to what direction real estate market is going, either up or down. This segment in our demographics is one of the most looked indicators in analyzing markets like real estate. With that, Realtor Magazine has identified the millennials real estate trends in 2019. Read what they think as trends for the younger generation below:
5 Millennial Real Estate Trends in 2019
More millennials are pursuing homeownership now than ever before. The national homeownership rate rose to 64.4 percent in the third quarter this year—an increase of half a percentage point over a year ago, according to the U.S. Census Bureau. That’s largely attributed to the rise in new, first-time home buyers.
As 2018 comes to a close, Dana Bull, an agent with Sagan Harborside Sotheby’s International Realty who has significant experience working with millennial clients, shares five trends to expect from this generation of buyers in the coming year.
1. Rising Interest Rates Will Prompt Buyers to Change Strategy
Just last week, mortgage rates rose to a seven-year high, with 30-year fixed-rate mortgages averaging 4.94 percent. It’s more than likely that rates will climb over 5 percent in the new year. This will cause many buyers to pause and reevaluate their purchasing power and strategy, Bull says. “Even a quarter point has a real impact on housing affordability,” she says. This means you’ll need to take more time to help clients analyze deals and understand what their money can buy in this shifting market.
2. Increased Competition From Baby Boomers for Properties
As millennials age and grow in their careers, they are acquiring more purchase power. According to the 2018 National Association of REALTORS® Home Buyer and Seller Generational Trends Report, 30 percent of millennials purchased homes for $300,000 and higher in the past year, up from 14 percent in 2013. That means millennials and boomers are going head-to-head for the same homes today. That trend is only going to continue to grow in 2019, Bull predicts. Both groups also seek similar amenities, including walkable neighborhoods and smaller home sizes with more upgrades, she points out. “Buyers in different generations—with wildly different points of view—are competing for the same homes,” she says. “For sellers and agents, catering to two different generations in marketing homes will also be a challenge.”
3. Willing to Put In Sweat Equity
Millennials are becoming more savvy to renovations and repairs, and they may have HGTV to thank for that, Bull says. “Millennial buyers are still far more aware of the work, costs, and implications of a renovation than their parents would have been,” she says. “Popular TV shows mean a more educated millennial buyer who knows what to look for in terms of red flags. But also has more confidence around renovating a home to make it their own and the ability to see past outdated wallpaper or a wall that can be easily removed.” Keep this in mind as interest rates continue to rise in 2019 (re: trend number one) and you’re helping clients who want to get creative while staying in their price range.
There you have it, the forecasted real estate trends for 2019 and the roles of millennials and younger generations to where the market is heading to in the next months. This made a lot of sense as this segment of our population have the money to buy and invest into properties in Baltimore and in different parts of the country. If you own a house in Baltimore and want to sell you to a millennial, Dependable Homebuyers will help you find the right buyer for your precious home. Visit https://www.dependablehomebuyers.com and find help in selling your homes fast and easy.