The smart real estate investor will always know the signs, trends, and statistics that affect the real estate market. These can be small trends that develop over the year or they can be big trends that are felt all across the country. Real estate investors need to be aware of these trends if they are going to make smart investments. One way they can do this is by reading real estate market reports that forecast what will happen in the next year and beyond.
Renters Are Moving Away From Urban Areas
The real estate market on a city level is largely tied to the strength of that particular economy and how attractive it is for both businesses and individuals. In 2020, there was an increase in people moving away from urban areas. This trend continued into 2021 and looks like it will continue well into 2022. This pattern is due to many factors, including many workers switching to remote work due to COVID-19.
New Home Building is on a Downward Trend
Many building projects came to a halt due to COVID-19. Homeowners have stopped building new homes since it made less financial sense to do so. On top of that, many builders weren’t prepared for the financial repercussions of the pandemic. This caused an interruption in production that led to many projects being put on hold.
Mortgage Rates Remain Low
It looks like the trend of lower interest rates will continue. Some of the lowest interest rates were seen in early 2020. This gives investors more opportunities to purchase property. Demand for residential mortgages is expected to increase again on its upward trend.
Condominium Sales on the Rise
In recent years, there has been an increased demand for condominium properties from older millennials and buyers who aren’t planning to have a family. With the baby-boomer generation reaching retirement age, condo living will be more attractive to them.
Housing is Still Unaffordable for Many
Despite the changes in mortgage lending rules, it is difficult for buyers to acquire homes these days. There is a shortage of condos and detached houses in many good locations. Prices are still unaffordable for most income brackets.
Home Prices Increases Are Faster Than Wage Growth
In larger cities, house prices are increasing more quickly than wage growth. When it comes to the real estate market, the debate rages on, with many arguing that housing affordability is a myth, while others see it as an ongoing crisis. The real home values have been rising consistently for years, but the pace at which they are rising appears to be at an all-time high.
Consumers are Buying Smaller Houses and Waiting to Buy
For years, people have been buying bigger homes to accommodate large families. But with millennials entering the real estate market picture, buyers are now looking at smaller homes to accommodate smaller families.
Check out what else is happening on the local real estate market here.