Every day, real estate agents are faced with the ever-changing facts of the housing market. In fact, not many other people are quite so vulnerable to the laws of supply and demand and its inevitable fluctuations.
Savvy real estate professionals are always following the trends in the housing market and using the insights to their advantage. For those brave souls, here are a few trends to keep an eye on in 2015.
The Good News
The Economy Is Turning Around – Simply put, optimism is on the menu in 2015 as unemployment is reaching its lowest point in half a decade. Additionally, geopolitical considerations indicate a strong dollar for the foreseeable future. When the economy is strong, the housing market tends to mimic it!
Homebuyers Trust Great Realtors – Even with all of the wonderful information on the internet, nothing can replace what great realtors do. Homebuyers may be more informed by online sources, but that doesn’t change the trust they put in real estate professionals. Buying a home through a real estate agent is on the rise!
All Home Sales Are Up – From new housing to pre-existing homes, realtors are selling significantly more homes in 2015 compared to 2014. The millennial generation — estimated at nearly 80 million young adults in the U.S. — is beginning to enter the housing market as well. It’s a time of opportunity to help first-time homebuyers make their first real estate investments.
The Bad News
Affording A Home Is Becoming More Difficult – Although the economy overall is showing signs of recovery, wage growth has not kept up with recent changes. As home prices and mortgage rates increase in 2015, the affordability for many buyers will decrease. This makes affording a home a more distant dream for many Americans.
The Conversation Is Changing – For better or worse, the days when a real estate agent could completely dominate the housing conversation are over. The plethora of information available online means that buyers will come to the table with more knowledge and expectations about housing options. Real estate professionals will benefit by providing online tools and resources for homebuyers, and by being helpful guides in a sea of information.
First-Time Buyers Are Financially Challenged – Without a doubt, the old days of 3% down payments and limitless government guarantees are over. In the coming years, first-time homebuyers will have to jump through a lot of hoops before any financial institution lends them money, if they can afford the investment at all. The combination of stagnant wages and increasing student debt is delaying would-be homebuyers from entering the market.
There are a variety of indicators that could make for an exciting or somewhat lackluster real estate market recovery so things will feel a little bit wobbly throughout the year. The biggest factor to watch will be if young homebuyers have enough optimism in the steady state of the (not so wobbly) economy to buy the home of their dreams in 2015.
Millennials Are Driving The Market – As the overall economy rebounds, and millennials are becoming a larger part of the workforce, they will become a major influencer in the housing marketplace. Addressing the needs and concerns of this unique group of first-time homebuyers will become increasingly important.
Technology Is A Game-Changer – Real estate agents will have to stay on their toes to better serve well-informed buyers. Fortunately, many buyers still turn to real estate agents for reliable information and guidance in the housing market. Although technology can make client acquisition more competitive for real estate professionals, it also provides an opportunity for agents to reach buyers online.
Builders Shifting To Multi-Family And Commercial Properties – Although single-family homes will always have a place in the market, builders are shifting their focus towards multi-family and commercial properties. This may create a crunch on the demand for single-family homes in the future.
The Housing Market In 2015
The housing market has always been a moving target, and 2015 will be no different. For real estate professionals in the know, keeping an eye on good, bad, and uncertain trends will keep your business thriving even in changing times.
Real estate is an exciting and constantly changing landscape, and Pearl Insurance is a trusted partner dedicated to helping agents be successful. No matter what market conditions may be, Pearl Insurance can help keep you protected with comprehensive Errors & Omissions coverage. For more information, speak with a real estate insurance specialist today at 309.447.4982.