The real estate industry is evolving at a constant pace. Trends weave in and out just like fashion and often make comebacks. While the trends that look fresh and modern today can appear outdated overnight, the ones that were once dismissed as irrevocably worn-out can unexpectedly come back in vogue.
Now that we’ve entered the second week of the year and the New Year’s hype has died down, it’s time to take a closer look at the evolving real estate trends for the year ahead. So, without further ado, let’s dive in!
Here’s a quick overview of what will happen in the housing industry this year. As 2018 kicks off, buyers will be more in control as the housing supply will finally catch up with their demand, according to a report released by Realtor.com. In addition to that, more millennials will be getting out of their parents’ home and buying a separate home of their own. Experts predict a “smooth landing”, a booming Seattle, along with some minor technological changes. In simpler terms, the real estate industry is promised a relatively smoother ride this year.
From affordable housing supply to tax reform to generational & regional shifts, here are the top three emerging commercial real estate financing trends that are bound to make a big impact in 2018, and beyond. Buckle up, it’s going to be quite a ride!
Housing supply will finally catch up with the demand
With millennials and Generation Z crossing the 150 million mark and baby boomers content to stay in their homes for longer periods of time (instead of downsizing), younger generations are meeting a housing shortage. After three long years of shortage in the housing supply, finally, there’s some relief for home buyers in 2018. There’s a prediction made by Realtor.com that the housing supply shortage will finally ease up later this year.
Here are the wordings of Danielle Hale, Chief Economist for Realtor.com, “It looks like we could get to a point where we’re seeing growth in inventory sometime in the fall of 2018.”He added, “Once we start to see inventory turn around, there is plenty of demand in the market.”On the whole, prices are expected to increase, especially in case of lower-priced homes. “It will get a bit worse before it gets better for buyers of starter and mid-priced homes”, Hale concluded.
Now that’s some good news for potential home buyers who’ve been frustrated in their search for a home that meets their needs and budget.
Gen Z will dominate the market
Tired of hearing stories encircling how millennials are reshaping the real estate market? Well, here’s some good news for you. Finally, a new demographic has emerged on the radar of economists and trend forecasters, which is ready to take the previous gens out. It’s Generation Z – the generation born between 1995 and 2001, which is predicted to hit the housing market in the same way as millennials did, laden with debt and favoring a more urban lifestyle.
Gen Z will enter the working world seeking structure and stability. They are more competitive than their former gens and can be easily distracted. However, before they make a noticeable impact on commercial real estate financing, they’ll likely to have a much greater effect on the retail and shopping industry. Their philosophy surrounding gadgets and social-media will put more and more pressure on retailers and landlords to create more gadget & technology-oriented stores with connectivity responding to individual preferences.
Tax Reform brings uncertainty
The recently finalized tax bill (passed by Trump Administration) leaves a lot of uncertainty for those involved in the real estate industry. It may restrict new home-buyers from entering the market. The tax reform involves the proposals to double the standard deduction on personal income, change the investment amortization, and eradicate the 1031 tax-free exchange program and low-income housing tax credits (LIHTCs).
Experts predict that if this version of tax reform is passed with the current provisions (affecting real estate), then we would expect to see fewer home sales and a certain decline in the home prices. However, the effect will be more noticeable on homeowners living in high tax states like California and New York as it will limit their state and local mortgage deductions to $10,000.
As you can see, optimism is already running high for 2018 real estate market. Apart from the predictions stated above, there are many other foreseen trends that will shape the future of commercial real estate financing, which include southern homes selling like crazy, a certain decline in the foot traffic, the emergence of an agent-free market, a notable shift in the retail real estate, millennials starting to come into their own, and more.
If you’re looking for a reliable real estate firm in Rancho Cucamonga, CA that can integrate the above-mentioned commercial real estate financing trends into your business, then look no further. We’re here to help!