Today’s greatest real estate investors know it, and it’s about time you did, too: real estate trends, or at least the ability to translate them, can prove invaluable to the advancement of one’s career. Real estate market trends are, after all, the perfect indicator for divulging not only where a market has come from, but also where it has the potential to go. The more investors know about today’s emerging trends in real estate, the more likely they will be to realize success. But, of course, not all trends are created equal; some are inherently more valuable to follow than others. The key is to identify the trends most likely to last and capitalize on the position they may place you in.
Real Estate Market Trends Impacting Buyers & Sellers This Summer
The weather is on the brink of heating up in nearly every real estate market, and that means one thing for those with their finger on the pulse of the national housing sector: things are about to get a lot more interesting. If for nothing else, the summer real estate market represents the busiest time of the year. It is at this time when the whole of the entire housing market gains an incredible amount of momentum from both buyers and sellers. It is worth noting, however, that the summer real estate trends of 2018 look perfectly comfortable mimicking those of the previous years. The trends we have seen up to this point, and even the trends we should expect for the foreseeable future, are to be expected.
To be perfectly clear, there are a number of real estate market trends that are impacting buyers and sellers this summer, not the least of which include:
It shouldn’t surprise buyers or sellers to learn that these trends look like they will carry over into summer. That said, it would be wise to familiarize yourself with them on a more intimate level. The more you can expect to glean from the upcoming summer real estate market, the more likely you are to navigate it with success. Who doesn’t like the sound of that?
If you are interested in giving yourself a competitive edge this summer, you’d be wise to learn as much as you can about what to expect.
Of the real estate market trends most likely to carry a lot of weight in today’s investor landscape, home sales deserved to be talked about first. It is home sales, after all, that serve as one of the most important market indicators for gauging an area’s health, and those that take place over the course of summer are no different. Home sales will take place at a fierce pace this summer. According to Zillow, the average home lasts on the market for 78 days, but don’t get to caught up in that number. If anything, that number will witness a decrease in the coming months, as it does every summer. Case in point: home sells will speed up as the competition heats up. There are simply too many buyers eager to get into a new home, and summer appears to be the time they hope to do so. As an investor, take note of the speed in which buyers are willing to move; it’s one of the real estate trends most likely to be maintained by the state of today’s market.
High Demand And Affordability
Few housing markets across the United States, if any at all, have managed to solve the largest problem facing the real estate landscape: inventory levels, or lack thereof. More specifically, however, supply and demand is currently dictating today’s exponential increase in prices. It is worth noting, however, that demand hasn’t taken a step back. The economy is better off today than it was even a few short years ago, and there are more buyers looking to participate in the housing market, but there’s one problem: there aren’t enough homes to satiate demand. All year, in fact, prospective buyers have wanted to partake in the market, and have been met with opposition around nearly every single corner, and it doesn’t look like this summer will offer a solution. That said, investors should go into summer knowing that they aren’t alone. The next few months will be competitive to say the least, which means success will favor the prepared more than ever. As an investor, factor the competitive nature of today’s market trends into your acquisition strategy. Instead of low-balling sellers, try offering a little more, or even exercising an escalation clause. Real estate price trends suggest inventory levels will only continue to drive up prices, so be prepared for the cost to go up. Doing so could mean the difference between having your offer accepted or ignored.
Hot markets are, for all intents and purposes, a relative classification. Nearly every market in the country is firing on all cylinders at the moment. However, there are markets that are doing better the others. Most notably, the California real estate market appears to be setting an incredible pace. Whether or not that pace is maintainable remains to be seen, but there’s no denying the activity currently taking place in The Golden State. More importantly, the California real estate market has several of the “hottest” markets in the country, not the least of which include:
According to Realtor.com, California accounted for 13 of the top 20 hottest housing markets as recently as the first quarter of this year.
Real Estate Technology Trends
The advent of technology has certainly shifted the way things are done in every industry, and the housing sector is no exception. Real estate technology trends have drastically improved the way people take on what can be, at times, an intimidating industry. Real estate technology serves one purpose: to make our lives easier. It is safe to assume that investors using the right technology are at an advantage over those that, well, aren’t. The key, however, is to adopt the right technology. There are technological advancements that are far superior to others, and it’s in your best interest to use those that will give you the best edge. Here are some of my personal favorite real estate technology trends at the moment, and how they can advance your career:
Commercial Real Estate Trends
Real estate market trends aren’t relegated solely to the single-family landscape; they are also present in the commercial sector. Here are two of the most important trends investors should be keeping an eye on this summer:
Emerging trends in real estate don’t necessarily have to come out of nowhere. The majority of the real estate trends I spoke of here are the result of months, if not years, of anticipation. They are now trends because they appear ready to carry over the momentum they have already generated into summer. It is worth noting, however, that those aware of what’s going on stand a better chance of realizing success, and today’s investors are no exception. If you want to give yourself an advantage over the competition, be sure to listen to what the market is saying; it may be the only thing you need to take your career to another level.
On Point Homevestments
When you buy a house or an apartment, there are several steps: You decide how much money you can spend; find a property you like; make an offer; negotiate an acceptance; sign a contract; line up your financing, and then close on the property.
So, in some sense closing is what you’re working towards. It’s the point where you sign the papers that make the home legally yours, and it’s usually when you get the keys. (Note that it’s often not when you move in; that usually comes hours, or even days, later.)
The exchange of “money for keys” is very similar to what happens when you rent. However, there are a couple of big differences when you’re buying instead of rent, and there’s more opportunity for things to go wrong.
Let’s take a look at some of them, so they don’t happen to you:
What’s Supposed to Happen: A representative from your lending bank shows up with the money for your mortgage loan.
What Could Go Wrong: In your “commitment letter,” the lending bank outlines certain conditions in order for your closing to happen (for example, you can’t close until you buy homeowner’s insurance.) You could forget to fulfill or violate one of the conditions (for example, by changing jobs between the time your commitment is issued and the time you close.)
How to Prevent It: When your commitment letter comes, read it carefully to make sure that you are doing everything you’re supposed to do. Often there’s a list involved, so if the letter says, “your commitment is conditional on your doing A, B, and C,” go ahead and do A, B, and C. Also read the letter to see if there is a list of what violates your commitment. A common commitment breaker is a changing financial status, so don’t change jobs or make a major purchase between commitment and closing. As Michigan mortgage banker David Hall puts it, “Wait and sit on the milk crates for the first few weeks in the new home.”
What’s Supposed to Happen: When you finish signing the paperwork, your broker is supposed to put a full set of keys in your hand, including keys to the front door, the mailbox, and the bike shed.
What Could Go Wrong: The seller could forget to bring keys to closing (sometimes that’s a mental block because he or she doesn’t want to let go of the property) or you find out that the side door key has been lost since 2005.
How to Prevent It: Have your real estate agent contact the seller to make sure that all the locks in the house are in good working order and to remind her to bring a full set of keys to closing. If you are doing your walk-through of the property right before closing, that’s a good time to remind the seller, too.
What’s Supposed to Happen: If you’re getting a mortgage, the bank is supposed to itemize its charges on a form called the HUD-1 Settlement Statement, which indicates money going between the seller and the buyer.
What Could Go Wrong: Although you’re supposed to be able to examine the HUD-1 in advance, often the charges on it are actually worked out at closing by the buyer’s, seller’s and bank’s attorney. So, you may see it late, not understand it, and leave without a copy of it (which you’ll need later when you file your income taxes.)
How to Prevent It: About.com has a blank HUD-1 on its homebuying site. Take a look at the form before your closing so you have some idea of what it looks like. At closing, take a few minutes to read the form and make sure that everything looks like you expect it to. Also, ask your lawyer to make a copy of the form for you since your accountant will need it come tax time.
On Point Homevestments