William Collins is a real estate developer dedicated to staying on top of the latest trends in the industry. Today, he discusses his top 5 real estate trends for 2023.
1. Digital House Hunting
Digital house hunting was certainly around before the
pandemic. However, it's become much more common in the last few years. One
reason for this is necessity. The pandemic made in-person showings more
difficult.
However, the developments in technology have also played
a role. 3-D tours give prospective buyers lots of information about the home
and its appearance, without having to leave their living room.
2. Exodus From Cities
This is another trend intensified by the pandemic, but
it's expected to continue for the foreseeable future. Some people are choosing
to leave the big city behind due to cost.
Real estate in popular cities like New York is very
expensive, and the cost of living is much higher than average as well, William
Collis explains.
Many homebuyers are discovering they get much more bang
for their buck in the suburbs. They can purchase a larger home, often with more
amenities, for less.
Remote work became very popular during the pandemic as
well, allowing individuals more flexibility in where they choose to live. While
remote work isn't quite as common as it was during quarantine, it's definitely
here to stay.
3. The population of
"Sunbelt States" Continues to Increase
William Collins explains that the sunbelt
encompasses 17 states that make up the southern U.S. On the west coast is
Southern California, and on the east coast is South Carolina, along with all
the southern states in between.
In the last 10 years, these states account for 75% of the
country's population growth. These states were once considered a destination
for retirees. Today, they offer lower taxes and lower home prices than their
northern companions, making them a popular choice for people of all ages.
4. A Growing Housing Shortage
The current housing shortage has its roots in the 2008
housing collapse. During this time, new construction slowed, along with home
sales. This led many contractors to find work in other fields.
Demand began to increase again, while new home
construction didn't increase enough to keep up with this growing demand. This
is compounded by a generation of millennials ready to purchase their first
home, and baby boomers downsizing and searching for more modest homes.
Today, there is a shortage of 3 million homes in the U.S.
5. Increasing Rent Prices and
Demand
Rent prices are closely tied to inflation, which is one
factor in rising rent prices. Housing supply, including rental properties, is
low for the current demand, which also raises the price tag, according to William Collins.
Another factor is that buying a home is more difficult
these days. This is due to stricter requirements for a mortgage, along with low
supply. Mortgage rates are increasing, which also makes renting more
attractive.
Perhaps the biggest driving factor is that even though
rental prices are increasing, renting is less expensive than buying a home. In
95 % of cities surveyed by ATTOM, rent was cheaper than the average mortgage
for the same type of home.
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