Month: March 2023

The Future of Real Estate: Keeping Up with Industry Trends

Real estate is ever-evolving, and the market is subject to change based on the economy. However, several underlying drivers affect the real estate market, from cities to suburbs and everywhere in between. Wondering about the future of real estate? Here are a few industry trends you should know: 

Pet Accommodations

Dogs and cats are more than pets; they’re family members. As more sellers and buyers realize the importance of accommodating pets, you can expect more fenced-in yards and pet amenities in rentals. For example, more landlords are offering pet policies that include a pet deposit and various fees, allowing residents to have pets for a cost. 

Having a pet policy can help landlords stand out and attract more renters who would otherwise be without a living space because they have pets. Instead of buying a home, these individuals might rent to save money, helping landlords fill more vacancies. 

Meanwhile, sellers and buyers are focused on pets. Home sellers can fence in their yards to attract pet parents while community developers add dog-friendly parts and areas around neighborhoods. 

Digital House Hunting 

House-hunting apps aren’t new, but more buyers continue to purchase homes without seeing them in person. Instead, they rely on virtual tours and staging to determine whether or not to buy a home. As a result, online staging has grown even more popular, although there has been some decline in recent years. Still, online real estate platforms allow individuals to browse listings, talk to agents, and find mortgage options that they otherwise wouldn’t.

Low Home Inventory

The real estate market has undergone drastic shifts over the last few years, resulting in low inventory. We’re starting to see that inventory growing, but there still aren’t enough homes to satisfy buyer demand, resulting in higher home prices. Home inventory has been moving upward, but the number of home listings remains low. Luckily, the real estate market tends to shift from a buyer’s to a seller’s market every few years, so eager home buyers may have to stay patient. 

High Mortgage Rates

Interest rates fluctuate based on the state of the economy. However, you can reduce your interest rates by having a higher credit score, effectively reducing your monthly mortgage note. That said, the average mortgage rate has been high in recent months. You can reduce how much you pay in interest for a mortgage loan by selecting a 15-year loan with lower rates and a shorter term length. 

Unfortunately, higher rates can affect affordability for buyers, so it’s essential to calculate how your interest rate will affect the total cost of your loan. That said, you shouldn’t let high-interest rates prevent you from purchasing a home, but you should aim for a higher down payment or a more affordable home, which means potentially compromising on the features you want. 

Online Real Estate Services

Apart from online house-hunting apps, other online services allow you to buy or sell your house. For example, third-party buyers allow you to tell companies about your house. Then, they’ll buy it from you for cash and resell it at a higher price, handling the entire process for you. These companies have existed for years, but they’ve recently gone digital, allowing increased access. 

There are downsides to working with third-party buyers you should be aware of, though. For example, some of these companies charge service fees, which can reduce your profit. Additionally, they don’t always research fair home prices and tend to offer much less than selling your home through an agent. 

Additionally, you can use a virtual agent that offers hybrid services that result in lower agent commissions to help you earn more on the sale of your home. 

Technology

More and more apartment communities are offering technology as an amenity that sets them apart. For example, apartments now offer electric vehicle (EV) charging stations. However, that’s not the only technology making a splash in rental communities. Property technologies provide safety, convenience, and security for residents. For example, app-based smart locks, thermostats, and lighting have made it easy for residents to lock their homes and change their home temperatures remotely. 

Additionally, video intercoms have streamlined visitor management, allowing residents to see their visitors before allowing them into the building to prevent theft without going down to the lobby or buzzing in a stranger. Simultaneously, smart parking features allow privately owned parking spaces to be rented for a fee, allowing individuals to rent out their parking spots or find parking spots near home faster than ever before. 

On the homeowner side of the market, smart home technologies have continued to intrigue buyers and sellers. Smart home technologies are already integrated into new homes, with smart refrigerators that notify you when you’re low on something and can send notifications to your smartphone.

More Expensive Rentals

Rental prices continue to rise and are determined by the local housing market. In some markets, renting has become more expensive than buying a home. Additionally, some individuals may find that their mortgage payments are just as expensive as rent, making them want to become home buyers even faster than originally planned. 

For example, in the midwest, rent prices and mortgage payments are about the same. Unfortunately, many young people are still priced out of the market because they can’t afford a large down payment. Luckily, several loan options are available for first-time home buyers that reduce the amount required for a down payment. However, it increases their monthly mortgage payments, which makes buying more expensive. 

The Future of Real Estate

Unfortunately, no one can predict what the real estate market will have in store through the rest of this year and beyond. In some areas, homes will remain unaffordable for most buyers, with rent increasing in others. The following years could be a good year for both buyers and sellers depending on their locations and personal financial situations. However, you should be prepared to compromise. For example, sellers might have to compromise on price while buyers have to prioritize their wish lists.

In any case, staying up to date on your local real estate trends is crucial to make the best decisions for you and your family. 

Ashley Nielsen

Ashley Nielsen earned a B.S. degree in Business Administration Marketing at Point Loma Nazarene University. She is a freelance writer who loves to share knowledge about general business, marketing, lifestyle, wellness, and financial tips. During her free time, she enjoys being outside, staying active, reading a book, or diving deep into her favorite music. 

How Does the Real Estate Market Change During the Seasons?

You’ve heard of a buyer’s or seller’s market, but did you know the real estate market changes depending on the season? First-time homeowners should know how the different seasons affect their buying power, allowing them to make better decisions and potentially save money on their first home purchase. But, of course, the real estate market fluctuates, and your local market will predict your selling or buying power, so you must continue to watch the market to get the best deals. 

Real estate seasonality trends are common and can occur within the same calendar year. Let’s look at how the real estate market changes during the seasons. 

Best Time to Buy

Of course, the best season to buy a home depends on the particular buyer. However, there are some months to buy a house that are better than others if you want to save money. For example, January is a good month to buy a home because it’s less busy than the summer months. Therefore, summer months have more competition, which can spark bidding wars, while winter months have less competition, which may help you negotiate better prices. In addition, by the time the new year hits, real estate activity in the area has likely decreased, so anyone who didn’t sell their house during the summer may be more desperate to sell, potentially reducing prices. Additionally, if a house sits on the market all summer long, the buyer will have more negotiating power. 

While winter is the best season to buy a house, the worst seasons to buy a home are fall and summer. For realtors, April is typically the busiest month of the year, meaning buyers have less power because there’s more competition. Home prices often increase around this time, so if you’re looking for a great deal, consider waiting until summer has ended. 

Real Estate Through the Seasons

Now that you understand the best and worst times to buy a home, let’s discuss the different seasonalities of the real estate market. 

Summer Real Estate

As we’ve just discussed, summer is the hottest real estate season, with tons of competition and more houses on the market. Summer comes right after spring, and it’s the time of year when most people are actively buying or selling. This is especially true in areas with all four seasons since activity typically ramps up during the warmer months. During the summer, buyers have fewer commitments; they don’t have to worry about taking their kids to school and picking them up, and the cold weather doesn’t keep them from touring multiple properties. Unfortunately, sellers know buyers typically come out of hiding around spring and summer, so they price their homes accordingly. 

The summer real estate market is competitive. Buyers and sellers compete constantly. Sellers compete with other sellers in the area, and buyers may have to give up some of their negotiating power just to lock down a deal. In addition, sellers know that competition means a higher asking price, but they must compete to get the buyer interested in their home. Everyone is competing with everyone else during the hot summer months. 

Of course, there’s nothing wrong with a little competition in the housing market as long as both buyers and sellers are prepared. For example, buyers shopping on a budget must include the potential for bidding wars, so they may have to look for homes with a lower asking price. In addition, buyers will have to find other ways to land their dream home, such as sending personal letters to the seller to sway them. 

Meanwhile, sellers must accurately price their homes during this time. If a similar home has a better price, it’ll get the attention of all the buyers. In addition, they’ll have to find ways to stand out during the competitive season, which may include spending more money on marketing and advertising the property listing or investing in renovations such as kitchen remodels to prep for the back-to-school season and repairs to make the property more attractive to buyers. 

Autumn Real Estate

During the fall, the real estate market is still hot from the competitive summer. However, many homes have sold by this time, which means more negotiating power for buyers. Fall may signal a slowdown in the real estate market, depending on where you live, especially as temperatures drop around October. However, it’s still a great time to buy and sell. When the weather starts to cool, and we get closer to winter, the market favors buyers because sellers start getting desperate to sell, especially the longer their homes are on the market. During the fall, there’s less competition because most people looking to buy a home do so during the summer, so buyers will have to reduce prices soon. 

In addition, buyers stop competing with other buyers because there are fewer of them, which means fewer bidding wars and more opportunities to negotiate with sellers. 

Winter Real Estate

As we’ve mentioned, winter is the best time to buy a home. There’s virtually no competition among buyers because most purchase a home during the warm months. Now, those individuals are cozy inside their new homes waiting for spring again. However, those who want to buy a home during winter have tons of negotiating power. Sellers must consider every offer that comes in because there are fewer buyers, which means fewer chances to sell. In addition, winter is usually when most sellers reduce their prices to get more attention from prospective buyers. 

Therefore, if you’re looking to buy a home, you can take advantage of great deals while everyone else is hibernating for the next few months and land your dream home at a lower cost. 

Spring Real Estate

During the spring, the real estate market picks back up with more activity than in the last few seasons. Those looking to purchase a home will come out of hibernation as soon as the weather gets warm again, which means more competition among buyers and sellers. If summer is the most competitive season, spring is the second most competitive as people begin fixing up their homes and preparing to sell. However, the more demand there is, the more power sellers have. 

Is Seasonality Always a Factor?

In most cases, seasonality is always a factor, no matter what’s happening in the economy. Even if we enter a three-year seller’s market, you can still expect buyers to have more power during the winter, when sellers are most desperate to sell. However, the best time to sell a house depends on your unique circumstances.

Megan Isola

Megan Isola holds a Bachelor of Science in Hospitality and a minor in Business Marketing from Cal State University Chico. She enjoys going to concerts, trying new restaurants, and hanging out with friends.