Real estate has been through so many changes over the past 10 years and there are more to come. If we take a good look at how our population is aging and changing you can easily forecast some changes ahead. In this two-part series we will look at the top 10 changes and trends the real estate industry will experience in the next few years to come.
- BABY BOOMERS DOUBLE DOWN ON REAL ESTATE – Baby Boomers invest big in real estate – Baby Boomers are coming into some cash in the way of inheritance money and they are investing it heavily in real estate. They are selling their homes and moving into urban centers into luxury condos or they are staying in place and retro fitting their homes with extravagant renovations. They are also lending money to their Millennial children to buy real estate. In addition to all of this they still have time and money left over to buy vacation, recreational or investment properties. The Baby Boomer is PRO real estate and they are proving that with their inheritance dollars. Baby Boomers are also choosing to live near or with their children which is creating an opportunity for their children to be able to qualify for a much larger home size and price tag.
- MILLENIALS DOMINATE THE MARKET -Millennials are now in their mid-30’s and they have definitely started to settle down and raise their families. They are being forced to buy real estate in the suburbs because of the high price of real estate in the urban centers. This age group has more jobs being made available to them than any other generation and their wages are rising so they have more buying power now than ever before.
- NEW HOME PRICES SOAR – House building hits all time high price per square foot costs due to the lack of labor available in the work force. This is forcing builders to raise the price of their homes and lower the finishing detail to save money. It is not uncommon to walk into a master bedroom closet and see absolutely nothing but the walls. Builders know that many new homeowners will custom their closets anyway and if they have to save money this is a place they can do that. Lack of labor and increasing cost of product is causing a big hike in new construction costs.
- WEST COAST HOME PRICES -West coast house prices will continue to soar as inventory continues to decline and water and well issues continue to plague many counties in the Western States. This causes challenges for builders and land owners which causes a further lack of inventory which then adds to the lack of inventory and rising home prices. Seattle, Portland, Northern California and Denver will continue to see robust markets. Job growth is fueling these markets along with strong population and migration growth.
- TRANSIT ROUTES – Transit routes homes will become hot investment properties. With the traffic issues looming heavy in many of the Washington cities it will become even more important for investors to choose their properties carefully. One of the hottest investments out there right now are homes and condos near transit lines and light rail lines. People are looking for ways to leave their cars at home in lieu of paying for parking and being stuck in traffic so these types of real estate investments are extremely attractive to investors that know they can get premium rent for these well-located properties.
Stay tuned next week for the next 5 changes and trends in the real estate market.