5 Real Estate Market Predictions (And What They Mean For The Agent And Investor)
Every year, the real estate market changes. And sometimes, it changes faster than you thought it was going to. 20 years ago, agents and investors didn’t have real estate websites — they relied on the talk of the town and coffee-shop conversations to generate business. Of course, that is still partly true today, but with a twist: If you’re not online … then you’re behind the curve and you’re likely losing a steady amount of potential business. Not because you suck at your job, but because people can’t find you where they’re looking: online. That, though, is just one example of how the real estate industry is changing. That doesn’t mention constantly fluctuating inventory and interest rates or technological advancements (like drones and 3D house walkthroughs). Clearly, you have a lot to keep track of. To help, though, here are five real estate market predictions that we here at Carrot and some of the top real estate investors working with us are expecting to see. 1. Inventory Will Increase Slightly Over the past few years, the U.S. has consistently broken the record for lowest inventory. For instance, Forbes reports that, in 2010, inventory sat just under one million, at 967,604. The most recent count puts that number at 653,347. As you already know, that low inventory means you need to be careful with your investments. It drives the cost of homes upward with bidding wars and the number of opportunities downward. Fortunately, there’s good news on the horizon. Samantha Sharf, Forbes columnist, continues… “The general consensus is that inventory will pick up slightly. The biggest reason for this modest optimism is that the current situation is unsustainable. Prices cannot rise faster than wages forever. Plus, life events will eventually force reluctant sellers off the sidelines.” And she’s not alone in her prediction. Danielle Hale, the chief economist for Realtor.com, says, “The majority of the year should be challenging for most buyers, but we do expect growth in inventory starting in the fall… We expect the relief to start in the upper tiers, and it will make its way down to the lower tiers.” The beginning of the year likely won’t see much change, but, by the end of the year, here’s to hoping that inventory starts on an upward slope — even if it’s slight. 2. Renting Will Become A More Popular Option With the cost of housing surging in certain areas, we’ll likely see an increase in the portion of people who choose to rent instead of buy. CNBC reports that, “In the nation’s top 50 markets, half of the housing stock is now considered overvalued, based on market fundamentals, like income and employment.” When the price of housing moves upward, more people, generally speaking, look to renting options rather than buying options. This, of course, depends on your location and requires that you understand the place where you invest. Overall, though, expect renters to flood the market. Jason Bible, real estate investor in Houston, says that he’s going to try and get his hands on as many rentals as he can this year. “We buy over 100 houses a year and this year I will buy as many rentals as I can get my hands on. In fact, I am going to buy some of them at 100% retail with a 20% down loan.” You might want to consider doing the same. 3. Home Buyers Will Be Even More Tech Savvy The real estate market moves fast. But the tech world — driven in large part by social media, a mobile-first culture, and ecommerce trends shaping the future … Continued