We always hear our grandparents say “back in the day, life was so different”. The way of living was different, the cost of living was different; and home-buying was different. The world is changing and if you don’t keep up, To find out how home buying has changed over the years we need to first compare how it was in the past and how it is now. Let’s begin!
1. I’m getting OLD!
Unlike in the past, people are delaying home-ownership and are not as interested in home-buying as they are about renting. The overall age of home-ownership is steadily rising and millennials are preferring to rent than buy. According to the National Association of Realtors, the median age of home buyers was 33 in 1985, and now it’s 44!
2. It’s not just couples
Back in the day homeownership was mainly for married couples who made up 81% of all owners. Now homebuying has become diversified containing single women, single men and unmarried couples.
3. Home prices are reaching the sky!
Your parents probably paid around $80,000 for the house you grew up in. Nowadays real estate investors are paying twice that amount, if not more! Household income increased as well. According to the U.S. Census Bureau household income increased 127% from $23,618 in 1985 to $53,657 in 2014. So it comes to show that in past life was cheaper and incomes were low, making home values affordable.
Probably the most obvious change is the increased availability of information thanks to the explosion of technology. Back in the day, real estate agents kept listings of homes for sale in small three-ring binders or on index cards. Now purchasing a home is just a click of a button away. The use of technology and the internet has made real estate investing so mush easier. Real estate agents can show buyers 20 homes at a time on the internet without having to go through the old-fashion way of paper. Now the majority of buyers are finding their properties through online websites. Mashvisor for example provides investors with nationwide analysis of real estate properties both traditional and Airbnb. Investors are able to fully analyze a property with the right predictable data. This way investors can know how much they are going to benefit from a certain property before making the actually decision to buy. Now this is definitely a real estate advantage our ancestors were deprived from.
Downpayments before vs. downpayments now
According to the survey, the typical downpayment for all homebuyers in past was 20 percent, the standard amount we’re used to hearing. But now, that number is around 10 percent, meaning first-time and repeat homebuyers are putting down much less than they did in the past. This has helped decrease the obstacles of homeownership for buyers who are unable to save up the 20 percent; of course it also means they’re making larger mortgage payments each month.
The use of real estate agents
While searching for a home has certainly become easier in the past 40 years, it seems pretty obvious that the actual buying process has remained difficult enough to call for the use of a real estate agent. In the past, 82 percent of buyers used an agent or a broker, and now that number is gradually increasing to 87%. While this has increased and decreased over the years, the majority of buyers have made use of a professional’s help when purchasing their home, since it’s helpful to get another set of eyes and hands on all of the paperwork and make sure you’re handling everything correctly.
A final word
We all know that the world is evolving and developing. Technology is shaping up our lives. The younger generations are taking over the market. So as real estate investors you must always keep in mind these changes and adapt your investments in accordance to these changes. Say good bye to the good old days and hello to the future. Homebuying has formed a new style that requires you to upgrade your knowledge about it.