You’ve seen the shows on HGTV and Bravo that give you a first-hand look into the world of luxury real estate. And while you may not have the funds to invest in the kinds of houses you’ll see on “Million Dollar Listing,” your future home will be just as exciting and monumental. Becoming a first-time homeowner comes with a lot of responsibility to research and understand all the nuances about your purchase. You‘re looking for a dream home and a great place to establish your family for many years to come. It’s not a decision to take lightly.
As you begin your journey toward homeownership, it is important that you understand the business side of things and what trends can help or hurt you on your journey. Every year, different elements such as economic impact, generational growth, and unforeseen circumstances can alter the market. And in a year like 2020, that has been particularly crazy and unprecedented, experts have definitely observed some changes in the market.
The market affects your own plans to purchase your perfect home, but it can also have an impact on the general economy in your area. Big businesses are constantly relocating to take advantage of cheaper areas and neighborhoods grow and expand as the year pass. Know that certain trends from this year may not carry over to the next year. In fact, things can change from month to month in this business. As far as 2020, here are just a few of the top trends that experts and team members have recognized in the real estate market.
Trending toward new home building.
When you’re looking to purchase a new home, you have a few options. You can choose to buy a home that is already on the market, or you can decide to create your dream home and work with a construction manager or subcontractor to help bring your vision to life. During this year, new homeowners have been opting for the latter. Custom home design is on the rise, and hiring a custom home builder is the new way to guarantee you end up in the right place that checks all your boxes.
When you turn to custom home builders you don’t have to settle on any part of your home. You work directly with an architect and contractor to develop a floor plan and home design that suits your family’s needs. They are with you every step of the way to create a home with every amenity you need whether that be a big patio, luxurious bathroom, or dedicated workspace. This flexibility and openness to specific suggestions are the reasons why new home building was predicted to increase eight percent during the year 2020.
How has the Coronavirus pandemic has affected the market?
As you near the end of 2020, it’s impossible to talk about the year without discussing the impact of the Coronavirus pandemic. Chances are, your finances and lifestyle were drastically changed in wake of the current situation. Layoffs and increasing unemployment numbers have meant people may not have the same amount of savings or career growth to pursue buying a house. Those who have continued working may now be working from home full-time. This requires new, specific suggestions for your living space. While you may not have needed a cleanroom or home office before, being forced to stay inside for an extended period of time has reminded you of the need for a livable enclosure. When your home becomes your workplace, school, gym, and leisure space all in one, you’re going to require some more space and potentially a different floor plan.
The emergence of Covid-19 also reminded individuals of the need to stay sanitary. The real estate business isn’t only for individual buyers and sellers, it impacts companies as well. Industries like medicine and technology have been leading the charge in fighting the pandemic, but they need clean, safe places to do so. This caused an increase in the need for clean room construction. A cleanroom design specifically creates a sanitary space to keep contaminant levels low or even nonexistent. The need for these new spaces has been a top priority and will continue to encourage the market into 2021.
A younger generation of home buyers has emerged.
As the years go on, the millennial generation, born between 1980-1996, is growing up and starting to settle down. Last year, 45% of homebuyers were millennials, and that trend is expected to continue throughout the next several years. And as home buyers become younger, agents need to up their game to keep up with the times. A generation that knows and understands technology will demand the same of their real estate agents. It can be hard work to improve your internet presence, but it can be a major step toward connecting with the right people who are hoping to become homeowners.
Demand for more equipped, experienced real estate agents.
Because of the advanced role technology has taken in the modern home-buying experience, real estate agents are being forced to keep up. Experts have noticed that experienced agents are bringing in more clients than smaller or independent agents. As the market expands and more young people get involved, average agents will start to fall off while the best and the brightest will thrive.
A successful real estate agency isn’t only about the relationships with clients. It’s imperative that the team works well together and shows solid growth as a unit. Groups like Venterra Realty have been recognized with an institute award for creating a happy, healthy workplace with excellent project managers and a collaborative employee experience. Companies like this with years of experience creating a good relationship between themselves and their customers are on track to take advantage of the current trends.
The economic impact creates a seller’s market.
The real estate business is really double-sided. You have buyers and sellers, and usually, the market benefits one or the other. The current trends indicate a sellers’ market. Due to the economic impact and uncertainty from Covid and other trends, many people agree that this may be a good time to sell their home. While this is excellent news for agents and sellers, it can be a negative point for those looking to purchase your first home. Prices may rise in a sellers’ market. With the uncertainty of the current financial picture for many Americans, it only makes sense that you want to get the most money for your biggest asset.
Prices slowly are rising, but mortgage rates are going down.
Through the years, housing prices continue to rise. The positive is that the increase in 2020 was a lower margin than the past few years, but that doesn’t mean prices aren’t still rising. However, the economic uncertainties have caused lenders to offer mortgages with lower interest rates than you’ve seen in almost a decade. So if you’re taking out a mortgage to buy a home or hire a custom builder, you may be in luck with a lower mortgage rate.
The market is looking healthy for the near future.
Overall, the real estate market is a good gauge for how the economy is doing, but it may not seem as relevant to you if you’re not looking to buy or sell a home. Experts have predicted that your home equity will continue to rise throughout 2020. You also shouldn’t worry about the market crashing anytime soon. Though there is a lot of economic uncertainty circulating in 2020, the housing market is staying strong.