The real estate market is one of the most traditional areas of the economy and, at the same time, one of the most dynamically developing markets. Therefore, it is so important to keep up with the latest trends.
For some, it is an opportunity to become the owner of the first housing, for others, it is an opportunity to expand or move to a more convenient area. Also, it can become an investment in order to save money or receive passive or additional income reliably. According to real estate analysts, some of the 2019 trends will be projected into this year.
Real estate prices will rise slowly
In 2019, real estate prices grew more slowly to 3.3% than in 2018 to 5%. According to housing forecasters, in 2020, there will be a slight increase, and prices may grow by 2.8%. But they will not grow as fast as in previous years.
For sellers, higher prices mean good profit opportunities. However, nowadays, many buyers are leaving the housing market, which may lead to fewer offers for many homes.
Therefore, to be ready for such a turn of events, be aware of your competitors. Especially if you want even with fewer offers, your accommodation stands out among similar ones in your area. Also, work with a housing agent to help you make a list of your property at the right price and prepare your real estate for potential buyers.
If you want to buy a property, then you should find competent experts to help you find and buy your dream home. But be careful and wait for the right offer for you.
For home buyers, higher prices mean more money. If you are an investor who wants to buy a house in an expensive market, then try to calculate how many objects your budget can really afford. Moreover, with the help of a mortgage calculator, you can even independently determine the monthly payment.
It is very important not to rush through the purchase and stay within the limits of your budget. You should not buy something that will not bring you profit in the future, regardless of the successful purchases in real estate of your competitors. Choose wisely, otherwise, you can simply ruin your finances.
You most likely will not be able to afford property in that market in the event that you could not postpone about 10% of the 15-year ordinary loan with a fixed rate. All this is because a down payment of less than 10% will have a serious effect on your finances with large monthly mortgage payments. But if you want to prepare for a purchase, then there are several of the following options:
- Saving. If you are motivated and patient, you can save enough on a five-digit down payment next year.
- Improve gradually. If you can’t buy the already equipped house that you want, you can find a cheap property in the best area and start improving it as your savings and income increase.
- Advanced Search. Even in a less popular area, you can find quite good real estate. Working with a housing agent who really knows your business and area can greatly help you find a home that fits your goals and budget.
Mortgage Interest Rates
A similar thing happened back in 2019 when the rate for common types of loans was below 4%. According to economists, in 2020, interest rates are likely to be at 3.2% for a 15-year mortgage and 3.7% for a 30-year mortgage.
But things like trade wars, tariffs and much more can change the economy by little. This will lead to the fact that the Federal Reserve System to balance the situation will begin to raise interest rates.
For real estate sellers, low-interest rates mean that buyers will be more motivated to buy your real estate sooner. But in the event that rates begin to rise later in 2020, plan to keep your property a little longer on the market. A mortgage is a big responsibility, and with the advent of higher interest rates, it can scare away many buyers.
Working with an experienced housing agent, you can determine how much time you have to wait for the right offer and how much you can earn.
For buyers, low-interest rates mean that it is better to use the usual 15-year mortgage with a fixed rate if you do not buy in cash. So you will definitely know what your payment will be during the term of the loan.
Most property buyers still remain millennials
Millennials are those who were born between 1980 and 1998. According to housing analysts, they accounted for 37% of property purchases in 2019 and again became leaders as the largest group of buyers.
For sellers, buyers millennials may mean greater demand for properties, because the older generation of investors or just buyers usually already have housing.
It will be even better if you are more active on the network because this generation is well versed in the Internet sphere and conducts all research through it before buying real estate. If you want to figure this out a little better, here are a couple of tips:
- Updating online listings. According to statistics, last year, 98% of millennials used the Internet to search for housing. Also, more than 80% of them found their property through a mobile device. Therefore, make sure that you invest in high-quality prints of photographs, and as an option, consider conducting a digital tour of the house with the help of footage for the property.
- Convenience of the place. For buyers of the new generation, such details are important, like travel expenses and how close the housing is to cafes, grocery stores, and schools. Most of them said in one of the polls that they are less likely to compromise with the quality of the district and schools when they choose real estate. So think about such details, instead of trying to sell your object in size.
- Popular real estate features. A storeroom is important for 79% of modern buyers, 80% would like to have a garage, 81% want a patio, and a facade made of hardwood, and for 86%, a laundry is essential.
For ordinary buyers, millennial buyers mean competition, especially if you are looking for a three-bedroom single-family home in the suburbs.
According to many other forecasts of the real estate market in 2020, we can say that this year will be no less interesting than the past. Due to changes in the exchange rate, an unpredictable factor for both developers and buyers, it can be predicted that this year will have a significant impact on the problem of exchange rates. At the same time, one should not expect radical changes in the price of the market as a whole.
In 2020, objects of integrated development with developed own infrastructure will remain in demand. In the central parts of cities, where the land area is quite limited, non-standard projects may begin to be in demand, with the introduction of intelligent and green technologies.
As for the class, already this year, many buyers are showing more interest in more comfortable housing. In some countries, the demand for comfort, business-class projects increased and decreased for economical housing. Most likely, the same trend will continue in 2020.
Also, a new real estate format entered the market and began to be actively implemented – apart-hotels under the management of companies. Small-format areas are used there.
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