From interest rate hikes to shifts in the physical, political and economic worlds, the real estate housing market is directly impacted by these effects. Many of these top challenges are trends that can be anticipated well in advance, which allows professionals to be proactive and make adjustments for future success. Although it’s hard to predict the size of new markets, here are a few hurdles you can expect to see in the real estate housing market:
Even with a resurgence in home prices, there are several financial factors to be aware of in today’s real estate housing market. With interest rates currently on the rise, this may make consumers a bit wary of taking on new loans. Factor in the high amounts of student debt and debt in general, this is also making consumers more hesitant about taking out new loans.
Financial concerns aren’t just impacting new home buyers, but also more experienced buyers. The financial crisis has had a major impact on consumer’s investments. Those who are close to retirement are looking at their underfunded retirement accounts and putting off the purchase of a retirement home or even the thought of downsizing.
With Baby Boomers retiring and Millennials making up the majority of the workforce, the overall demographics are changing, which has a profound effect on the real estate housing market. Millennials now have different needs and preferences that must be taken into account, such as finding a home in a more active urban area with restaurants, trails, bike lanes, and public transportation.
Another key cultural challenge we’re seeing is the focus on sustainability. More and more companies are starting to create healthier work environments for their employees with a focus on water and power conservation, which is what millennials are also looking for in their own homes.
With the rapid advancement of technology, we are seeing a drastic effect on commercial real estate. Companies are finding better and more efficient ways of performing business, which means the office atmosphere is changing. More and more employees are working from home, which means companies aren’t needing as much office space.
These technological challenges also impact the real estate professional directly. There’s an increasing pressure to have an online presence as a realtor. The cost factor of implementing these technological solutions can be tough to keep up with. With so many tools and accessibility online, customers may find less value in the services of a realtor.