The real estate market is subject to continuous and sometimes even instantaneous shifts and turns. That is why current and future homeowners need to keep their eyes open for upcoming residential real estate trends.
With today’s ever-changing political and economic climate, the real estate sector has experienced several trends that directly affect the residential real estate market. The following is a list of the most evident residential real estate trends in 2019.
1- Millennials are pursuing homeownership
According to a report published by the PwC, “Emerging Trends in Real Estate 2019,” homeownership for younger adults is on the rise. Despite the many articles stating that millennials do not want to buy a home, or they cannot afford it, numbers show the opposite. These days, more than one out of every three homebuyers in the US is 37 or younger, according to the report. This proves that millennials are following prior generations, although the desire/ability to own property is coming almost ten years later in life due to a number of financial and economic factors. Additionally, millennials still make up a significant portion of the luxury rental market.
2- Applied technology is changing the real estate game
Technological advancement is changing the way home buyers and home sellers are perceiving the real estate market. And on the other side of the picture, the widely available data on consumer preferences is helping real estate developers improve their multifamily developments to match the homebuyers’ needs.
Noticeable residential real estate trends of the 2019 housing market include the use of precise technology to build housing developments. Advanced technology is making it easier to manufacture prefabricated building elements that can easily be assembled on site. This, in turn, allows for faster development and thus generates cash flow way sooner than the conventional building procedures.
Even more interesting is how this kind of technology can be applied to residential property management. Technologies involving property management data, for instance, can help to cut costs and save time when it comes to the day-to-day of multi family investment management.
3- Blockchain for real estate
For those who don’t know what blockchain is yet, it is the technology behind cryptocurrencies like Bitcoin. Blockchain is not just changing the payment methods of real estate transactions. It is a decentralized database that can enable real estate investors and agents to access much more data on individual properties. Blockchain residential real estate trends could dramatically reduce market frauds and increase transparency by allowing for records to be created for every real estate property in the country. As we move into 2019, we are likely to see more and more prop tech companies try to integrate blockchain into residential real estate deals.
4- Home prices are still rising
The most obvious of all residential real estate trends for 2019 is the increasing home prices. In the 3rd quarter of 2018, the national home price appreciation for single family homes was at 4.8% and is projected to keep rising without any surprises. Median prices for single family homes at the end of 2018 are around $260,000, up from $240,000 the same time last year. Housing market forecast shows prices are to rise 4.3% in 2019 and 3.6% in 2020.
The shortage of affordable homes in the US is projected to continue over the coming year, as prices go up faster than inflation and wage growth. The main reason behind this is that supply has not been able to keep up with the increasing demand. The drought of available real estate inventory has been quite obvious, underlined by a combination of demographic, economic, and zoning (regulation) factors.
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5- Rise of the single-family rental asset
Single family homes make up more than one-third of all US rental properties, and the demand for single family rentals is increasing day by day. Today, there are about 16 million single family units in the US housing market, expected to increase to 29 million units by 2030. The rise of the single family rental asset is one of the hottest residential real estate trends that is showing no signs of slowing down. For real estate investors, the advantage of buying a single family rental is obvious in the high demand for such residential properties.
6- The buzz over senior housing
According to the Emerging Trends in Real Estate report, residential real estate trends such as the senior housing and care sector are generating a buzz in the US real estate market. The report shows that real estate investors are keen to invest in senior housing more than any other residential property type. Why the interest in the senior housing market? For a long time, senior housing has proved to outperform other commercial and residential real estate investments in terms of equity returns and net operating income. Furthermore, the rising transparency of the sector is paving the way for real estate investors to join.
7- Rent control and Airbnb regulations
Rent control has become an election plank for many political candidates. While local municipalities are trying to protect its residents’ access to affordable housing by imposing rental control, real estate investors and developers, however, see it as a losing proposition. They argue that controlling rent can have a negative effect on the net operating incomes and eventually suppress real estate development altogether.
The waves of crackdown on vacation rental properties can be also added to the list of residential real estate trends, with many cities trying to regulate Airbnb by enforcing zoning rules.
The Bottom Line
From applied technology changing how we perceive the real estate market to rent control and rising home prices, the housing market in 2019 is going to be dominated by these residential real estate trends. Keep them in mind as they are most likely to shape residential real estate investments in 2019.