Change is inevitable, especially in the real estate industry. Here are six trends to keep on your watch list as the industry shifts and grows.
Trend #1: Millennials are on the move
The millennial generation has been somewhat late to the game of real estate. Many from this demographic were saddled with student loan debt, forcing them to rent longer or live with their parents. The oldest segment is now in their mid-30s, and the prediction is that their current life stage will motivate them to settle down and buy more homes. More jobs are being created for this age group, markets are doing well and interest rates are low.
Trend #2: Midwestern appeal
With the millennial generation looking to invest in homes, predictions are that they will continue to look for markets that are more affordable, that offer well-paying jobs and that are in close proximity to large universities. And while many people already know of San Francisco, Calif., as “Silicon Valley” and Austin, Texas, as “Silicon Hills,” the new nickname for the Midwest, “Silicon Prairie,” is just starting to spread as abundant entrepreneurial opportunities develop in the U.S. heartland.
Midwestern cities are anticipated to grow in popularity because they offer so much of what millennials are looking for in their home-buying criteria. Which Midwest locations offer these millennial-friendly features?
Some experts suggest:
- Madison, Wis.
- Columbus, Ohio
- Omaha, Neb.
- Des Moines, Iowa
- Minneapolis, Minn.
Trend #3: The West Coast will continue to thrive
Job growth is increasing along all areas of the West Coast. Home sales and prices are expected to rise, and as a result, these markets will further dominate sales rankings. The top West Coast areas include:
- Los Angeles / Long Beach / Anaheim
- Sacramento / Roseville / Arden-Arcade
- Riverside / San Bernardino / Ontario
- Tucson, Ariz.
- Portland / Vancouver / Hillsboro Regions in Oregon and Washington
Trend #4: Suburbs and more affordable cities are on the horizon
While home prices and rates are increasing, affordable inventory is shrinking. As a result, it’s expected that more affordable cities and suburbs will see an increase in popularity.
In a recent report from the Urban Land Institute, American suburbs are still thriving areas that people are calling home. The report shows that in 50 of the largest metros in the United States, suburbs account for 79 percent of the population, 78 percent of households and 32 percent of land area.
Trends #5 & #6: Low inventory at entry-level price, single-family homes as investments
Ruben Gonzalez, staff economist for Keller Williams, highlights two trends that have risen to the forefront: low inventory at an entry-level price range and single-family homes as investments.
“Following the housing crisis, new home construction has concentrated in the mid to upper price ranges while demand rebounded throughout the market. We have also seen a significant resurgence in single-family homes as investment instruments, and investment demand is typically concentrated in the lower price ranges as well. This lack of new inventory and increase in demand has created a challenge for first-time home buyers in some markets.”
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