The real estate industry has gone through many transformations over the last ten years. There had been economic slumps, low inventory, foreclosures, and risky loans. But, what are the significant changes? Below are ways the housing industry has undergone an evolution.
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The Rise Through Ecommerce
On the side of the industrial real estate that suffered from the Great Recession of 2007 to 2009, the industry bounced to a quarterly sale that tripled from 2010 to 2015. The rise of eCommerce stores pushed real estate sales to thrive as it allows shoppers to purchase goods at the comfort of home. Meanwhile, what began as a trend continues to push on as growth went all the way to 2019. It influenced other physical retailers to take to the Internet and increase the demand for third-party logistics, warehouses, and distribution.
Homebuying Companies
Part of the e-commerce revolution started companies that buy homes as they are. Before, homeowners can only rely on listings and real estate agents. Today, when homeowners need to sell their properties, they can call homebuying companies that tend to close deals fast. Sellers only need to answer questions on the property’s condition so that the company can make an offer that’s usually below the market value. That’s because professional home buyers will buy the property so that owners who can’t make repairs or homes near foreclosure can get cash fast if they need it. You can go with construction loans.
Increase in Construction Projects
It can be said that 2017 was the year of the construction boom as Ohio alone saw about USD 4 billion in projects that provided over 200,000 jobs to the locals. More than anything, two changes happened at that time. First, there was a significant rise in renovation projects that same year. Secondly, the type of homes being built catered to millennials’ taste with spacious living areas at affordable prices.
The Mortgage Leniency
As it’s affiliated with the real estate business, the mortgage industry experienced changes over the years. First, mortgage rates hadn’t risen past 6% after 2008. Before the market crash, it was ranging up to 8.05%.
Secondly, the process became faster and easier to understand for homeowners. Before, the requirements included HUD1 and Truth-in-Lending documents along with the loan statement of account. The Consumer Financial Protection Bureau released the Know Before You Owe rule. It gave way to replacing the mentioned forms with easier-to-understand versions called the Loan Estimate and Closing Disclosure forms.
But, before taking out a mortgage, it’s essential to consider the factors. Rates can vary. If you start looking at the market, differences depend on the type of property you want to buy. You may also encounter the mentioned documents that will further explain the conditions that are easier for you to understand.
Shorter Supply Of Homes
Back during the recession, there were many homes in the market with more buyers in tow. The number of homes available was equal to a 13-month supply because of foreclosures. Over the years, the market had changed with fewer supply of homes for sale. By this time, more young professionals and families were looking to buy homes. More people can keep occupying the same homes because of lower interest rates, so the supply remains low.
Improvements On Health Care Real Estate
Over the last few years, more patients and consumers had seen how healthcare facilities evolved to enhance outpatient care. Reports from 2016 stated a decrease in patients needing to stay overnight and an increasing need for ambulatory services instead.
Back then, real estate for health care facilities focused more on the privacy setting of professionals. It was more critical for hospitals and hospices to have offices for specialists to see visitors in need of in-patient care. This allowed for more facilities for private consultations with health service providers.
The real estate trend shifted to outpatient care that required hospitals to step up and add ambulatory facilities. It’s now more common to see hospitals house same-day surgical centers and long-term acute care, among other things.
Increase In Rental Demand
On the side of commercial real estate, the Great Recession may have also produced more individuals and families that cannot own housing units. The market started eyeing the millennial generation’s preferences as the basis of the growing need for rental spaces. House ownership in the United States decreased in a manner that can be compared back to the mid-1960s. The younger millennial generation area is more geared toward apartment living, while their older counterparts aim for homeownership.
Changes In Consumer Mindset
Home ownership had always been a part of the plan for some, but more people are starting to become more cautious on how to make the plan come true. More are seeking the advisory of real estate agents. People are also becoming more discerning on affording a home versus taking out a mortgage to own one. It may be because they know someone who experienced losing a home, or they themselves may have become part of the problem.
Technological Advances
Not only is ecommerce helping the real estate industry flourish. There are other advances such as how artificial intelligence can spot if a community or neighborhood can become popular. Machine learning can help recognize patterns and deliver information to help form insights. Virtual reality tours are also becoming popular to help show off properties to potential buyers even before these are built. Mobile app listings are also becoming a staple to both buyers and sellers to inform about new housing units in the market today.
In Conclusion
The real estate business continues to have its shifting trends over the years as the generation of homeowners, renters, and consumers are changing. In all parts of the industry, whether residential, medical, commercial, and industrial, changes had been made to improve services. The last decade had been transformative, and those in the real estate business can look back to history to receive insights on how to continue moving forward.
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