No matter your real estate investing experience level, it is vital that you remain up-to-date on current real estate market trends to help make intelligent investments that maximize returns.
Real estate markets are affected by both local and general factors, including population growth, economic stability and interest rates. These influences determine supply and demand of properties.
1. Homeownership
Homeownership is an emotional journey for most Americans; homeownership signifies stability and independence that has long been sought out.
Reducing poverty evokes a sense of self-worth and helps build an enduring legacy for their children, and also offers economic and social benefits for families and their communities.
Homeownership has long been considered the American Dream, though home purchases by Americans has declined from its historical peak levels. Still, 61% of adults aim to become homeowners one day.
UBS survey data show that consumer intent to purchase homes remains resilient despite affordability headwinds like rising mortgage rate volatility. Furthermore, more Americans now believe owning their home as an investment than at any point since 2014 when this survey began.
This trend can be seen through an increase in investors seeking real estate investments. While some activity stems from homeowners looking to sell their house at a profit, more and more domestic investors are purchasing homes with plans of rehabbing and/or renting them out as rentals.
Due to these trends, single-family housing prices are on the rise and purchasing an existing home in many markets is becoming more challenging and expensive.
The housing market is an important engine of economic activity and a cornerstone of national wellbeing. When the housing market thrives, job creation and reinvestment are encouraged locally and this helps strengthen both state and national economies.
2. Affordability
An effective homeownership budget involves several considerations that need to be addressed carefully in order to be affordable, including household income, mortgage rates and home prices.
Sometimes home prices decline rapidly, making homes more affordable over time. Meanwhile, in other instances home prices rise faster than wages in an area, making it harder for prospective homeowners to afford their dream housing solution.
Business economists use purchasing power-adjusted house prices as a useful measure to analyze changes in housing affordability over time. This approach takes into account income fluctuations and interest rate shifts which affect purchasing power when making this assessment.
While many may assume that housing affordability is determined solely by one factor, it actually involves multiple considerations that come together in the form of both housing and transportation costs.
Example: A cheap house located in an isolated, high transport costs area can become very unaffordable; while more costly houses might prove more affordable if located near accessible, multimodal neighborhoods that minimize transport costs.
Another crucial element that influences affordability is housing supply. An abundance of older, functional houses will contribute to long-term affordability as prices decline over time.
Affordable housing also depends on the quality of jobs in an area, with strong job markets drawing new residents who stimulate the housing market while high costs of living causing people to move out altogether.
3. Renting
Renting is an attractive alternative to homeownership, offering some of the benefits without the commitment or financial strain associated with ownership. Renting is ideal for individuals who may be uncertain if homeownership is right for them or those unable to purchase one due to financial limitations or simply cannot afford one now.
Rent is the fee paid to an apartment or other property owner in exchange for using it, unlike owning which increases in value over time. Rent may be useful as an interim solution while one looks for their perfect place, making renting an excellent solution when considering their options or location.
Many landlords are also gaining valuable experience and making good income by renting out their properties to tenants, leading to the emergence of rental markets as an integral component of real estate in recent years. More and more investors are taking advantage of this opportunity with some reporting very high yields from investments made.
Renters markets are showing some early signs of expansion, which could indicate that demand is outpacing supply – though it remains too early to predict whether this trend will hold over into 2023 and beyond.
Still, real estate investments remain an integral component of the economy and can create jobs while serving as an excellent passive income stream for investors who don’t wish to buy their house outright.
4. Relocation
Relocating typically conjures images of families uprooting themselves and moving to an unfamiliar home or city. While relocation can be an intimidating prospect, it also presents an opportunity to meet new people and learn about other cultures.
Real estate market trends suggest that more Americans are opting to relocate from densely packed cities due to rising property values and tax rates in these locations.
Atlas World Group recently conducted a survey that confirmed this observation; their responses came from more than 400 relocation decision makers across various industries and sectors.
Relocating is often an anxious time for both job seekers and companies alike. To make things less taxing during this transition period, here are some steps you can take to ease the transition process.
Begin your move by creating an appropriate budget, which will enable you to track expenses as they occur and avoid overspending. Be sure to include factors like flights, movers, packing materials and short-term storage costs when setting this number.
When starting the search for your new home, research the areas that fit best with your lifestyle to ensure long-term satisfaction with your decision.
Once you’ve found a place to live, it is vitally important that you educate yourself on its local restrictions and ordinances. Knowing these will keep you out of any legal trouble later down the line and save time when making any purchases in your new city.
Relocating can provide an incredible opportunity to advance your career, but it’s essential that it fits you. If you have questions about what’s involved with making the move, speaking with your boss beforehand could help clarify matters.
5. Government Incentives
Government incentives for home ownership can be an excellent way to boost home values and help more Americans realize the American dream of homeownership. Such programs may assist first-time buyers and low-income individuals secure mortgages and meet down payment requirements.
These programs can also assist businesses in creating jobs and offering housing to those in need. Incentive may come in the form of loans, tax abatements or grants depending on your project and its objectives.
Real estate incentives can be found locally, state and federal levels and are an effective tool in helping your real estate project achieve its full potential. Many incentives have a multiplier effect which supports smaller projects in the area that have direct effects on larger ones.
When planning a commercial or residential construction project, one key way to save money is by researching all available incentive programs and their eligibility requirements. There are hundreds of programs offering tax credits, rebates, fee waivers, bill credits and more!
One of the easiest and quickest ways to locate incentives is using IncentiFind’s database. Simply enter your property address, and get a list of all of the incentives in your region.
Incentive programs are an effective way to boost overall profitability, attract new clients, and contribute positively to local economies – as well as making your real estate project long-term sustainable. Finding incentives appropriate for your real estate project requires understanding what benefits they bring both your company and community members alike as well as applying for only those you should qualify for.