The housing market was back up in 2015 and performing as well as pre-2007. This promised a bright future for 2016, with expectations that the market may go back to “normal,” meaning out of the post-recession effect. Fortunately, this has become a reality mostly due to the fact unemployment is now lowered and more people have money to spend on buying, rather than just renting a house. Let’s take a closer look at what other real estate market trends we can expect to continue seeing the rest of this year.
Real Estate Market Trend #1: Renting out houses on short-term leases will increase
In 2016, as Airbnb continues to grow and cities change laws that increasingly favor the now 8 year-old company, purchasing a second house with a specific purpose to rent it out on a short-term basis is becoming much more popular. Many people already use Airbnb to make some extra profit by renting out a spare room or their entire apartment while away, but more are buying properties for the sole purpose of listing it on vacation rental websites.
Airbnb, VRBO, HomeAway, and other websites make it increasingly easy to rent out your property as a full-time short-term rental.
Mashvisor gives you a simple and quick breakdown of how much you’ll make by renting out a house on a long-term basis compared to renting it out on Airbnb. The metrics cover the entire US and can be pinpointed to individual streets, giving you a prediction of the return you’ll be able to get on your purchase.
Real Estate Market Trend #2: Unaffordable rents will continue to climb as housing prices slow down
Even though more millennials are buying real estate, the median age of a first-time buyer in the US is currently at 33, the highest it’s ever been. Unfortunately that number is set to rise before it falls due to increasingly high rent prices, and no change in salaries. High-rents are always more of an issue in major cities than elsewhere, with young professionals often spending a lot more than 30% of their salary on rent.
As more and more young professionals move to the city and are unable to jump on the property ladder, rent prices will continue to increase. For those lucky enough with parental support or other means of financing, it’s a good idea to stop renting and start buying this year. Although housing prices will continue to rise, the increase is only expected to be around 3%, with rent prices everywhere rising much faster.
Related: How Much Can I Rent My House For?
Real Estate Market Trend #3: Eco-friendly houses will gain in popularity
Being environmentally-friendly is “in,” as a new real estate market trend. This is helped by the Telsa car “swag” and an extensive amount of press surrounding the Paris environmental agreement. Hence, more and more homebuyers are looking for eco-friendly features like solar panels, as well as smaller ways to go green such as smart thermostats and lights. While these may cost more initially, people of all ages are slowly realizing the importance of going green, and how much they’ll be able to save in the long-run.
There is a long list of gadgets that may cost more short-term but will ultimately be worth it – environmentally and financially. One notable gadget is the super portable solar charger kits from Voltaic. You choose how much power you want to use depending on your needs and they charge pretty much all appliances, saving you huge amounts on your electricity bills. Another great gadget that has dual purposes is the Water Pebble. Promising to shorten your showers, and therefore saving you both water and time, the pebble flashes when it’s time to end your shower. These simple, and affordable solutions are already popular, but soon entire houses will be built to be as eco-friendly as possible. Click here for inspiration.
Real Estate Market Trend #4: Technology and Real-Estate will collide
Great photos of a property are no longer enough. Airbnb offers a FREE photo service for any property, so now anyone can get professional photos easily. To really step up the game you need to utilize video tours giving potential buyers a real feel of the house, saving realtors and buyers time that would be otherwise wasted on house viewing. Almost all buyers will still want to see the house, but a video tour gives them a great understanding of the space.
ReallyThere.com offers 3D tours that are marketed towards people living abroad who are interested in buying property in the US. If you want to succeed in the property market in 2016, it’s time to get technologically savvy.
Finally, people will rely more futuristic data and online tools before making investment decisions. Mashvisor’s data provides investors with projections of rental income, cash on cash return, Airbnb occupancy rate, etc. in easy-to-read visualizations, eliminating the need to create spreadsheets. Using investment property calculators to get automatic calculations is a new trend in itself in the real estate market.