The real estate market proved time and time again how resilient it can be. Despite the current pandemic, it stood strong and managed to gather numerous property buyers and investors hungry for real estate to buy. Instead of a shortage of buyers, we continue to find a scarcity in properties for sale. This is expected to continue for more months to come. But what other challenges do realtors anticipate to face in 2021
Most people can’t even afford affordable housing. Many are struggling to get by each day due to their numerous debts. Millennials, for example, have thousands of student debts under their name as well as credit card debts.
Millennials are relocating to cities in an attempt to find a good-paying job. But since the cost of living in most cities continue to increase, they have no choice but to rent a unit instead of buying their own house. Even if they can get approved for a mortgage, there are a limited number of affordable properties for sale.
Most of the houses available in the market are the mansion-like homes of Baby Boomers. Since these are bigger and more expensive than starter homes, one will need more than just an ordinary mortgage to buy such houses. In most cases, people with stellar credit and a desirable debt-to-income ratio can get approved for a jumbo loan and buy a Boomer’s home.
Another reason why average Americans can’t afford a house is that the recession caused slow activities of home-building. There are only a small number of homes constructed with most developers targeting single-family homes. The lower the number of constructed houses, the more desirable these becomes, thus the bidding war begins.
Lastly, the single-family home zoning in the US contributed to the shortage of low-cost housing. In a nutshell, multi-family homes are banned in many neighborhoods, forcing homeowner-wannabes to stick to renting instead of buying a detached single-home. Some municipalities are trying to loosen the restrictions but several existing homeowners are against ending single-family home zoning.
Adequate Housing Solutions for Seniors
More Baby Boomers are intending to age in place. Many plans on downsizing their homes to make living and their expenses are a lot more manageable. Others made the conscious decision to live longer in their homes before putting the house in the market or giving the house to their kids.
But the problem is, many seniors are unable to get rid of these mansion-like houses. Most people can’t afford the price of such big houses. Millennials, on the other hand, have no plan on buying these houses.
Millennials prefer to live small and sustainably. Those who intend to give in to homeowners prefer smaller houses they can fix and upgrade. Their budget can only afford smaller affordable homes while others would rather embrace the tiny house movement.
Because of the lack of available housing perfect for seniors, they are considering senior-housing options. This means their house is pending for sale in the market. More seniors are expected to require senior housing facilities but soon, the supply will run out.
According to the U.S. Census, the youngest Baby Boomers will reach their senior years by the year 2030. The 2020 census claims that the estimated number of 73 million Baby Boomers. With Baby Boomer’s changing needs and requirements, there is a need for the housing market to watch out for this generation and live up to their senior living requirements.
Keeping Up With Advancing Real Estate Tech Trends
We can no longer deny the technology has a great influence no matter the industry. In real estate, consumers started looking for houses, are applying for loans, paying their mortgage, and selling their properties online. This had home sellers and real estate agents scrambling to keep up with all the tech innovations consumers are expecting them to have.
Now, property viewings are done virtually before buyers decide to check the property in person. Properties are marketed online and virtually. More buyers want their next homes to be eco-friendly and sustainable.
Private lenders are scrambling to set up their business online and reach potential borrowers looking forward to buying their next properties. Sellers are paying professionals to stage their homes and make their property look desirable to the mass audience in an attempt to sell the estate quickly. Even the way we choose real estate agents is influenced by technology.
Failure to keep up with real estate trends can put a property at risk of staying longer in the market. Lenders who fail to nail their online marketing will lose potential clients. Even real estate agents are attempting to keep up just to get more buyers on board.
Indeed, there are other issues the real estate industry is likely to face after the New Year. The people who will succeed will be the ones who can adapt to numerous real estate changes, be it the consumers, sellers, real estate agents, lenders, or investors. Only time will tell on what other challenges we can face when buying, selling, and investing in real estate by 2021.