Real Estate Trends for 2017 That You Won’t Read in The News
2017 is shaping up to be in many ways a landmark year for the real estate market. Millennials are finally beginning to buy homes, the landscape of suburban areas is changing, interest rates on mortgages are rising, and inventories remain a little tight and are expected to continue to be so for the foreseeable future. Though these are the trends you’re likely to see in the headlines and detailed at length in other real estate blogs, there are some lesser-known trends that are going to affect the market to an equal if not greater extent in 2017 and beyond.
You’ve probably heard that tight inventories are making it a seller’s market. That’s true, but average buyers may have even less of an opportunity to step up to the plate than would ordinarily be expected in such a market. This is because of two things: sellers holding the cards and prioritizing shorter times between listing and closing, and a flood of investors coming into the market and particularly foreign investors. More investors in the game necessarily leads to higher prices in that they can outbid average buyers and can afford less negotiation. They also have an incentive to buy because, as supplies remain tight and prices continue to rise, they can be reasonably assured that their investments will appreciate.
This is obviously good news for sellers, who tend to appreciate higher offers and shorter times between listing and closing. This will also have the effect of normalizing quicker sales. While quicker sales and the increased prevalence of investors on the prowl won’t entirely price out average buyers, both can limit their ability to negotiate when making offers.
So it’s reasonable to expect – but not a certainty, as with all things in the market – that supplies will remain tight while prices continue to rise, but this should be tempered somewhat by rising interest rates, which generally has the effect of lowering demand. When you see talking head on the news refer to the market as being a seller’s one, they’re right, but also take this information into account.
Even more consequential, though, is the rapid pace at which the Internet evolves and increases its role in the real estate market, particularly with respect to the purchase and sale of properties. Around the turn of the millennium, realtors and homeowners looking to sell their homes became aware of the power of the Internet because buyers homes were taking to the World Wide Web in ever-increasing numbers to find properties to purchase. It became obvious very quickly that web-based searches were more convenient, more efficient, and more cost-effective than driving around or going through classified ads. Thus, a high premium was placed on the real estate agent who was reasonably web-savvy.
Fast forward to the present day, where social media usage has reached unprecedented levels, and similar shift in the market can be observed. Buyers and sellers alike are, at this point in time, overwhelmingly likely to have at least two or more social media accounts. Social media, particularly Facebook for older demographics (35 and up), is especially influential on the choices consumers make when purchasing items if not the actual conduit through which purchases are made. The medium as a whole – but again, particularly Facebook – is a marketing powerhouse on which billions of dollars are spent each year courting consumers.
This has pushed buyers not only to realtors with the know-how or appropriate staff to utilize social media but also the resources to invest in their brand and make it work for both them and their client. It also increases the market share of larger real estate brokerages and better-connected agents in addition to making online listing companies a viable option for sellers. Not that this removes the need for agents (because most representing buyers won’t consider approaching a seller who doesn’t have an agent themselves), but buyers should keep this in mind, and sellers should consider hiring agents or firms with a robust and well-developed web and social media presence as well as those which display competent marketing techniques for the present times.
There are a lot of things to keep in mind this year as we navigate several factors that affect the real estate market, but remember to consider the factors that are less obvious or reported. For more on market trends and real estate advice, be sure to sign up for our Priority Access List and don’t forget to follow us on Facebook and Twitter!
– Get It Right Solutions