As the real estate market continues to evolve, new trends are emerging for 2018. Buyers will be more in control as the housing supply will finally catch up with buyer demand, according to a report by Realtor.com. Additionally, more millennials will be looking to get out of their parents’ basement and purchase a home of their own.
Real estate agents have the challenging task of changing with the market and being responsive to their clients’ needs. Whether it is a buyer looking to purchase a new house or a seller looking to get the best price for their home sale, real estate agents will need to stay up on the trends of 2018 and be ready to respond to a growing demand for real estate.
1. Coliving And Community-Driven Spaces
Coliving and community-driven residential will increasingly have a larger impact on the multifamily industry as it changes to reflect a new wave of renter demands and wants. Just as amenities have defined the last decade of commercial real estate development, the need for unique experiences and services will heighten competition.
2. Short-Term Rentals
The rise of the short-term rental market has created a boom in opportunity for large property owners or the single family owner. Priorities range from renting a room occasionally for extra cash to renting entire vacation homes at three to five times the local and regional market since you now can access a global community.
3. Fractional Investing
As peer-to-peer lending and crowdfunding catch mainstream attention, folks looking for greater diversification and passive investment opportunities will engage in factional investing. The last few years have seen some extremely credible startups innovate in this space, and next year could lead to individuals moving away from sole ownership to fractional ownership via crowdfunding.
4. Smaller Living
Tiny apartments and mobile living will be a solution to increasing housing density in overpopulated areas. This will become more of a norm in big cities and will drive up operating income on existing apartment stock. This likely won’t have a huge effect on 2018, but it will over the next decade.
5. New Appraisal Legislation
The new tax bill may further restrict new home-buyers from entering the market. Implementation of appraisal management company regulations in 2018 will increase costs and have the greatest impact on our business. It will increase the cost to do business, which will ultimately increase the cost to the consumer.
6. The Rise Of The Real Estate Investor
The stigma around the average real estate investor seems to have faded with the recession but also, the rise of the corporate/national real estate investor is happening as well. I see that niche becoming more competitive, recognizable and digitized in 2018. Many home owners won’t think twice about entertaining an investor offer alongside considering selling with agents.
7. On-Demand Access For Renters
We often hear from renters that they are too busy to sweat the small stuff. They want immediate tour confirmations, like booking a restaurant on OpenTable, and near-immediate confirmation that they have leased, like booking a hotel. This real-time service expectation from a new generation of renters is exactly what we plan to cater to in 2018.
8. Growth Of Private And Alternative Real Estate Investments
We expect consumers will continue to invest more capital into private and alternative real estate assets, as public markets remain at record highs across all major asset classes, and comparable yield risk remains favorable to private real estate vs. higher risk bonds and equivalents.
9. The Rise Of Micro Units
Rental rates have been increasing across urban areas for the last several years, and the most impacted cities have seen a rise in micro units. These well-designed rooms, as small as 200 square feet, maximize every square inch available. Places like The Panoramic in San Francisco and Yotel in New York have been the first to embrace the model, and we see this trend expanding over the next year.
10. Millennial Buyers
I believe that the new buyers are millennials and we, as agents, need to become more proactive in the community to become that millennial choice. This generation has many different options for home ownership including tiny homes, investment homes and coliving situations with friends or family. It’s going to be a huge learning curve and a fun adventure all around!