New Trends For 2018
Some analysts have predicted a positive growth in real estate over the next few years. Others disagree due to the nature of the market in 2017. According to a group of professionals in real estate who met in Los Angeles earlier this year, there was a slow growth in the industry in 2017. The meeting compiles 800 interviews with the market players and more than 1500 surveys from the sector. Today, we’ll discuss some of the trends that are in the market. The interviewees pointed out that the demand for affordable housing has increased tremendously. Many experts agree that there are still many challenges in the sector.
The increase in the number of single-family homes.
According to statistics, the number has been increasing over the years, unlike what many people think. The homes are offered at affordable prices, and this has benefited many low-income earners. Some experts have urged investors to venture into low-cost housing as it has shown immense potential. The main targets for these projects are the young adults. By identifying strategic locations, good pricing and installing appropriate amenities, the investors are likely to reap high returns.
Slow growth due to economic changes.
The changes in the economy occur from time to time. Recently, the economy has not been performing well, and many investors have fears that their investments may not yield good returns. Some economic analysts have predicted tough times in the future while others are optimistic that there would be an improvement. The analysts who believe that there would be good times ahead point out factors such as low unemployment and high prices for the assets. Many developers are adopting more conservative strategies to remain competitive. Due to these developments, the industry has experienced a steady but slow growth over time.
The human resource reforms.
Every firm aims at increasing the productivity of its workforce. To achieve that, the property developers are adopting practices such as regular training, providing adequate working space and improving the working conditions. For example, most firms have incorporated technology in service delivery to make work easier and to provide quality services to the clients. The practices help to boost the morale of the employees and eventually the growth and expansion of the firm.
The demographic changes in the economy.
The demand for products in any sector is highly affected by the changes in the size and composition of the population. According to statistics, the number of post-college clients in their early 20’s has increased over the years. The clients prefer an urban lifestyle despite the debts that have accrued from their student loans. Therefore, the property developers are encouraged to take advantage of the opportunity to cater to their needs. Some scholars argue that the age group likes to try out new things in the markets. According to some experts, the young adults are easy to convince to buy a home than the more elderly population. Most people in their early 20’s tend to be poor financial planners. A survey conducted in 2016 showed that 37% of them find it hard to save anything more than a few thousand dollars, if that. One of the strategies that the developers are using is to collaborating with buyers to make purchasing a home easier and more affordable. Statistics have indicated that more than 70% of the American population will have reached their retirement age by 2030.
The growth of the secondary markets.
According to statistics, the secondary markets have had a faster growth as compared to the primary cities. The main reasons for the development include the fact that many investors are now more informed on the modern practices and are taking advantage of it. Most cities have exhibited positive growth, and this is expected to be the case in the long run. Traditionally, the secondary markets have not performed well. There is an appreciation of the assets in the secondary markets, this has presented a good opportunity for investments. Many investors are now venturing into the sector hoping to get good returns in future.
The adoption of high-level technology.
Just like any other sector in the economy, the use of new technology for quality service delivery and boosting productivity is gaining prominence in the housing sector. It is common in both construction and in architecture where the experts are now using 3D printing for their projects. The use of new technology is expected to help in bridging the gap in the demand for affordable housing. It has also helped to speed up the completion of projects. Previously, the number of professionals in the construction industry has been very low and this has led to delays in delivery of completed homes.
The legal changes.
The government has proposed several tax reforms that are expected to affect the whole economy, including the housing sector. The changes will be implemented after a lengthy legislative process. Many players in the market have proposed the reduction of taxes. Some developers have argued that if implemented, the reforms are likely to make housing unaffordable to many residents. Many individuals expect that the tax reforms will make it easy for the developers to sell a home. For more information on tax reforms, contact your local certified accountant, and for information about home market trends and local real estate activity, contact your local trusted real estate professional.