Over the last year, there has been a drop in residential housing permits and sales. However, the market, overall, seems only to have declined slowly instead of having a significant fall.
FREMONT, CA: The U.S real estate market is large and dynamic. However, unlike other industries, static seems to be the new trendsetter here. The real estate market has been growing at a slow and steady pace without throwing many surprises. Although the economic and political uncertainties have clouded majority of the markets, real estate seems to have been prepared for it.
Here are six significant trends that define the real estate business today.
Surviving through Recession
The recession has been striking fear across all sectors and has had huge impacts on many businesses. Given these circumstances, the real estate business seems to be performing quite well. Over the last year, there has been a drop in residential housing permits and sales. However, the market, overall, seems only to have declined slowly instead of having a significant fall.
More Capital, Less Investments
The present unpredictable nature of the market has mellowed investments. Under such conditions, it is a matter of surprise that the economy is still performing at a steady rate. There is a lot of money flowing in the market, but there is a massive uncertainty over investments. Institutional investors have begun taking a more conservative approach. The temptation to invest your money somewhere still exists, leading to a lot of bad bets.
Prices Skyrocketing by the Day
The affordability factor has always been a major influencing factor when looking at real estate options. The current economic scenario, however, has had a significant impact on affordability. Markets that previously boasted of low-cost housing are soon to turn unaffordable. With the present housing rates, it is challenging for an average worker clocking 40 hours of work per week at a minimum wage rate to afford a house. Candidates on their campaign trail have even highlighted the affordability issue.
Community Oriented Development is on the Rise
The concept of shared commercial spaces is on the rise, as more and more people are being drawn towards it. The number of urban green markets has escalated from 2000 to 8700 over the last 25 years. There is an increasing liking towards foodie centric public spaces. The younger generations are attracted to places that favor sustainability and social interaction. While traditional business seems to be taking a hit, investment in community-oriented living has been providing sound investment opportunities.
The rise in Senior Housing Rates
There has been an increase in the life expectancy rates over the last decade, and the baby boomer generation is set to enter prime retirement ages. According to reports, Americans over the age of 80 is expected to double from 6 million to 12 million over the next 20 years. A large number of senior citizens are now on the look houses, which has led to an increase in demand for post-retirement homes. By 2035, one out of every three American households will be headed by a person over 65 years of age.
Slow, yet Steady Impact of Technology
Technology has always been the Achilles heel of the real estate business. The slow adoption of technology, however, finally seems to be making a difference. After years of knocking at the door, technology finally appears to be influencing the decision-making process in the industry. Digitalization of the buying process is one such change. With a surge in online property investors, realtors have begun to optimize their website for a more customer-friendly experience. Digital assistants and security cameras have become more prevalent in smart home adoption processes, and will only increase further with the advent of 5G networks.
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