In a world that seems to be changing faster by the day, buyers and sellers in the real estate market need to stay on top of trends. A real estate agency will encourage clients to learn about these three trends that are coming their way.
Inflation and Interest Rates
Much of the financing of property sales depends on interest rates. For the past few decades, the real estate world has operated in a regime of low interest rates. The federal government drove this trend, but that is now reversing rapidly due to inflation. As the government attempts to combat inflation, it is quickly raising interest rates to discourage big-ticket spending in the consumer economy.
What does all of that have to do with you? The simple answer is that your bank is more likely to impose a higher mortgage rate on your loan when you seek financing. Buyers have to worry about this because it makes the cost of capital greater. Sellers have to worry because it reduces the number of buyers who can finance at higher prices, which is the exact effect the government wants.
Notably, this trend should favor cash buyers as the market cools down. With less competition, folks who don't need financing will have more opportunities.
Real Estate as an Investment
Financial advisors are encouraging people to have diverse portfolios, and this often means buying real estate as an investment. There are many forms of investing in real estate, including buying properties for tax benefits, rental income, and flipping. Sellers need to be aware that some motivated buyers will be in the market with specific targets. These might not be the most fun folks to negotiate with, but they'll be some of the most consistent buyers in a cooling market.
Baby Boomers and Gen-Xers are now the people retiring in the U.S., and the new home buyers are predominantly Millennials. Also, Zoomers are starting to enter the market. This means Boomers and Xers are often downsizing main residences and looking for vacation homes. Millennials are in the prime age for buying bigger houses, and their tastes will predominantly dictate what remodeled and newly built places should look like.
In general, this means the median homebuyer wants a place that has contemporary or modernist lines. Also, Millennials and Zoomers want houses that match their digital lifestyles. Connectivity, home offices, and theater and gaming rooms are now appealing features.
On the flip side, retiring generations are looking for cost-effective places with appropriate amenities. Aging in place is also an important trend for this market.
Contact a service provider like Alan Daniel - RE/MAX Legends for more information.