Real Estate Trends

25 February 2020

Real estate trends are visible changes in the real estate industry during the course of some time. Trends usually depend on the transformations in the economy, consumer speculations or some changes in mortgage rates.

Over the past few years, the European real estate market developed rapidly and was considered to be the most attractive area for real estate investing. According to the statistics from November 2018, 48% of skilled people in the industry claimed that the income for their rental property investments would be 5-10%. 

Real Estate Trends
Real Estate Trends

It is worth noting that this article describes the trends in real estate in general. If we look more precisely at European commercial property, we will notice that one of its striking features is the difference in the value of the sectors. Thus, investors need to monitor various markets at once. For instance, the biggest difference is between warehousing and retail. 

In this article, we will observe the 2020 trends in real estate. It will help you to make the right choice, save your money and gain profit from your investment strategy.

  • Home Prices Are Rising Slowly

The first trend on the list shows that the value of the commercial properties like offices, shopping centers, and some residential properties, like apartments for rent, will continue to grow in 2020, although it will be the lowest percentage in the European market since 2012, about 5.8%. It is predicted that in 2021 it would be even lower, about 3.9%. 

What It Means For Sellers
What It Means For Sellers

What It Means For Sellers

It may lead to a great profit! On the other hand, you need to take into account that many buyers are pushed out from the market and this may lead to the lesser number of the offers. To win in this competition, you need to make your home different from the others in the area and develop your marketing strategy. Consult with your real estate agent and prepare your home for sale to avoid underestimation. 

Be patient and wait for the most suitable offer. Do not be in a hurry because of the shortage of buyers. Your patience will be rewarded. 

What It Means For Buyers 

If your plan is to buy a house, you need to calculate the price you can afford. Define the fixed budget and commit to staying with that amount of finance. Do not make spontaneous decisions because of the pressure while you observe how your competitors buy good homes. Your choice should be based on cold thinking.

If you can not afford to make a 10% down payment on a 15-year loan then you should not buy the property at this market. If the down payment is less than 10%, you will not be able to pay the large monthly percents from mortgage loans. If you want to get ready and buy the property, consider the following tips:

  • Keep saving money. Calculate the down payment and the small sum of money that you will be able to put aside every month and you would collect the costs by next year.
  • Choose an affordable option. If you cannot afford some type of house, you need to sacrifice some of your wishes and choose affordability over other characteristics. Search for the least expensive property in a good area. Over time, you will be able to upgrade the house while your savings and income increase.
  • Search in less popular areas. When the location where you were going to buy the property does not fit into your budget, it is reasonable to search at less popular neighborhoods. You will be surprised but you can find a gem there, even if you did not expect. Talk to the real estate agent and he will help you to find the rental property worth investing in. 
  • Mortgage Interest Rates Are Dropping

In the first six months of 2019, mortgage rates were high according to the standards, and it caused the slowdown in prices. Then the mortgage rates fell until September, and they got to about 3-year low. 

Housing economists predict that in 2020, mortgage rates will remain about 4%. 

What It Means For Sellers 

If the mortgage rates will remain low, it means that the real estate investors will have stronger motivation to purchase your property as soon as possible. In case, if the interest starts increasing, take into consideration that your house will be on sale a little longer. Buyers need to weigh all the risks before the purchase and higher interest rates make them hesitate to accept the conditions of the mortgage.

A skilled realtor will help you to define the expectations concerning the income you are likely to gain, and the amount of time needed to find the appropriate offer.

What It Means For Buyers 

Besides the fact that the interest rates are low, it is better to choose the 15-year mortgage with a fixed rate. In this case, you will always know the exact amount of your payment during the whole period of the loan. The mortgage with fixed loan provides the ability to plan a budget in advance. 

  • Millennials Are The Major Part Of Home Buyers 

Millennials were the largest group of home buyers, about 37%, in the year 2019. Millennials are the members of the generation born between ‘80 and ‘98 years. 

What It Means For Sellers
What It Means For Sellers

What It Means For Sellers

The essential condition of selling a house is the target audience. It affects the whole strategy which a home seller should use to achieve success and to conduct the best transaction. We suggest you several useful tips in this matter:

  • Make your online listing attractive. About 98% of millennials use the Internet to find the apartment. According to statistics, more than 80% of buyers found their homes via mobile devices in 2019. Your goal is to create the best impression on the Internet – update your photos, upload the high-quality video of your property, prepare a nice description.
  • Increase the emphasis on the location and infrastructure. The research showed that the millennials were more likely to choose the proper location and good neighborhood over the parameters of the flat like the size and number of square meters. Millennials usually pay attention to the neighborhood because they are interested in the sense of community. 
  • Highlight the popular features. Millennials are not ready to make compromises about the condition of the apartment for purchase or rent. 

There is a list of the top features preferred by the millennials. These features are garage storage, patio, walk-in pantry, and others. Also, if the Millenials want to buy a house, they are often looking if the building is pet-friendly and has the yard for the dog. If you add some of these features while upgrading your house, you will increase the chances to sell the property. 

Millennials are tech-savvy due to the fact that they are living in the digital age. They are often looking for smart home technologies that give the ability for remote control. Also, they prefer a modern minimalistic design with clear lines. You can paint the walls in neutral colors like grey and cream.

What It Means For Buyers 

Define the main criteria of your dream house. You need to set priorities in order to achieve your goal. 

  • Consider the key issues. Choose the most vital options that you need to have in your future property. If you are married, you need to talk about these issues with your spouse and come to an agreement. 
  • Write a personal letter. The letter to your seller will help to distinguish your candidacy from the other applications. You may include the personal story in your letter and describe the factors that you like the most about the house. 
  • Hire professionals. About 90% of home buyers for the year 2019 requested the real estate agents to purchase their houses. This will help you to prevent stress while purchasing the property on your own. 

Other Trends For 2020

Equity Will Not Decrease Through 2020

According to the research, the prices will continue to grow during the next few years. So, if you sell the property before 2022, you are likely to gain a good profit. Continue monitoring the prices of homes to make certain that the equity is rising. 

The Real Estate Market Is Not Going To Collapse

The collapse in the real estate market may happen if the banks and funds invest in risky financial products.

Some people are afraid of the collapse of the real estate market. This is not likely to happen, according to the forecasts of the experts. There is a number of factors that point that way: people are spending money and also, there is plenty of job opportunities.

The Buyers Are Less Choosy

Taking into account the fact that the prices grew rapidly over the past years, the buyers became less demanding. Despite the fact that locations matter, the buyers are willing to review the properties located in the neighborhood without the easy access to the highway or the ones that are located not close to the big city. If you think that you live in an unpopular area or your house is not suitable for sale, think twice. Maybe now is the perfect time to sell your property. 

Partner With The Real Estate Agent

It does not matter whether you are going to buy or to sell the property, in any case, you can hire a real estate agent. He would help you to review the current trends in the real estate business and take care of your financial goals.

Partner With The Real Estate Agent
Partner With The Real Estate Agent

Conclusion

Concerning the real estate market, it is pretty difficult to predict what changes will happen in the future. The best thing for an investor is to analyze and collect information about the local market to stay updated. You also need to diversify your portfolio to reduce some risks, and also make certain that you have a solid financial background before taking the next step.

Many economists nowadays predict that the repetition of the 2008 scenario is very unlikely, so the 2020 year will be quite different. We can observe the positive dynamics in the economy, higher employment rate, and economic growth. Despite the fact that sometimes things may change unexpectedly, the research shows that the 2008 market crash will not recur.

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