Here are a few trends and innovations to consider if you enter the housing market this year.
Rising Prices
Rising prices shouldn’t come as a surprise to anyone. Prices in the housing market have been rising for some time now, having more than doubled in the past 30 years. This trend isn’t about to change, but the data shows that prices are now rising slower than they have been in previous years, so that’s undoubtedly a good sign.
Low Inventory
The primary cause for the consistent rise in prices in the industry is a low inventory; too many people are trying to buy houses, and not enough places to buy. Covid-19 exasperated this issue further when people started trying to move to locations with lower infection rates. Even after the pandemic ends, it’s unlikely that this problem will solve itself any time soon.
Rising Mortgage Interest Rates
Not long ago, when middle-class people could no longer afford to pay the total price for a new house, all they had to do was take out a mortgage loan and pay it back gradually over time. This has become increasingly difficult in recent years as mortgage rates have risen to impossible highs.
The Covid-19 pandemic might have positively impacted mortgage rates, as rates across the country fell in 2020. Market analysts predict this decline should continue downward throughout 2021, or at least until the pandemic continues.
The Demographics
Since 2019, Millennials have surpassed Gen X and Baby Boomers as the dominant age group in the home buyer market. This trend will continue in 2021 as more millennials consider buying their first homes.
From Cities to Suburbs
More and more people have started to migrate away from urban city developments instead of looking for homes in smaller suburban communities. As the new predominant demographic in the buyers’ market, millennials prefer suburbs over city residences because they’re more affordable and experience lower crime rates.
Virtual Reality
As millennials have taken over as the primary demographic in the housing market, the tech-savvy generation has brought new technological innovations that are quickly pushing the industry in a bold new direction.
One such innovation is the use of virtual reality in the housing market. Virtual reality housing tours were already a niche practice offered by a few realtors and agencies before 2020; the pandemic saw VR becoming a popular method of conducting long-distance house tours.
VR home tours have many advantages over in-person ones for both agents and buyers.
- VR allows real estate agents to market and sell properties with little investment.
- It will enable buyers to participate for several hours daily, making their home-buying journey much faster and more efficient.
- Thanks to VR, buyers can experience house tours from their homes and across cities and countries if they hope to move internationally.
- It allows potential buyers to experiment with the interior design and décor of the house by instantly customizing a digital 3D representation of it in VR, as per their liking, when such modifications to the actual place would be time-consuming and expensive.
Apps
Since smartphones started using apps over a decade ago, they’ve become essential to our everyday lives. There seems to be an app for everything, and we use our smartphones in some capacity. Seeing this, real estate agencies have decided to leverage the power of apps, creating apps that make the home-buying experience easier and more efficient. Apps allow buyers, sellers, and agents to remain connected and provide a platform upon which buyers can find the best options currently on the market.
Cryptocurrency
The sky-high price of bitcoin has made it difficult for the virtual currency to function as a standard means of exchange, but with prices rising every day, the housing market may be the perfect space for bitcoin to thrive.
Experts believe the technology upon which cryptocurrency is produced and traded, blockchain, could also be a tool for innovation in the housing industry. Still, we’ll have to watch how the technology develops further before taking that plunge into the future.
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