Whether you are a buyer seeking information on the best offer to present or how to tour a home from afar or a seller who want to attract and evaluate the most qualified buyers, understanding the most relevant real estate trends is important in making the best decision possible. With that in mind, here are seven trends in today’s market that you should be aware of.
7 Real Estate Trends for Buyers and Sellers to Know
1, Modern features and maximizing space
2. Millennials are the largest generation buying homes
3. A slight shift to more of a buyers market
4. Buying sight unseen is still popular
5. The lasting importance of virtual tours
6. Delays in appraisals and inspections
7. Sellers are staying in their houses longer
Modern features and maximizing space
Because so many people spent more time than ever in their homes recently, they’ve learned that features and characteristics of their homes they once adored (or ignored) may not be beneficial anymore. Buyers are now leaning toward more modern kitchens and bathrooms and open floorplans to maximize the space. They also are favoring properties that require a lower cost for maintenance, like a landscaped yard and newer, more energy-efficient windows and appliances. For sellers, this means possibly putting a little more money into updating or renovating certain spaces to make homes more appealing to buyers and be able to command an even higher price.
Millennials are the largest generation buying homes
Millennials are the largest adult generation and now comprise the biggest portion of homebuyers. Also, Millennials are waiting longer to buyer their first homes and when they do it is often at a much higher price point than in the past, in many ways bolstering the luxury market. Many Millennials also place a high value on sustainability and quality of life. Though not the case everywhere, areas with booming entertainment, food, art, and outdoor recreation scenes are experiencing an influx of Millennials. For sellers, appealing to Millennials is key.
A slight shift to more of a buyers market
Because of continued low mortgage interest rates and high demand, the real estate market remains strong in the second half of 2021. However, after home prices rose 11.6% in 2020, growth was predicted to fall to 4.4% in 2022. For now, sellers are still in the best position in the market. Most people listing their home can still expect higher than average offers being made on them, even as trends slowly start to shift to favor buyers more. Because home prices are coming down from their peak, exhausted buyers will soon have room to breathe and find a home that’s affordable without engaging in a bidding war.
Buying sight unseen is still popular
After becoming immensely popular during the peak of the pandemic, fueled both by travel restrictions and an extremely competitive market, buying sight unseen remains strong. According to a recent survey, 42% of people would consider buying a house they haven’t seen yet. For busy and exhausted buyers, putting in an offer on a house they haven’t seen eases some of the stress of having to travel, especially if it’s cross-country or international.
Sellers can expect to see an inspection contingency in offers from buyers interested in sight unseen, potentially resulting in repair requests or a price reduction based on what’s found during the inspection.
The lasting importance of virtual tours
As mentioned above, many buyers are still leaning into purchasing a house without seeing it in person. In order to get a feel for the home, they’re consuming mass amounts of photos and videos. At Maine Home Connection, we specialize in property vides, as you can see in this link to our YouTube channel – Maine Home Connection. Even buyers who plan to visit the home in person prefer to access content like photos and videos online first. Buyers have also sent a person or agent to represent them during a showing and viewed the house through a video call.
The main attraction for virtual tours is convenience and it’s looking like virtual tours are here to stay. Even for buyers who are closer to their desired area, virtual tours have become an essential tool to help them find the home that’s right for them. For sellers, this means a greater influx of buyers viewing their homes and a higher chance of receiving multiple offers when they list with a real estate agent providing virtual tour services.
Delays in appraisals and inspections
According to recent survey by NAR, 23% of homebuyers reported appraisal delays that impacted closing. If an appraisal is below the purchase price, lenders are more likely to deny the loan, slowing down the closing process. As for inspections, 9% of people reported inspection as their cause for a delayed closing. If the inspection reveals serious issues that need to be addressed, negotiations about who is or isn’t willing to take them on could hold up the process and delay the closing.
Sellers are staying in their houses longer
Because buyers have been having a harder time combating low inventory and high housing prices, those who are buying and selling at the same time are asking for more time before closing. Sometimes, the seller might ask to rent from the new buyer for a period of time if their closing date doesn’t align with selling their previous home. For buyers who are open to letting the seller stay in the house longer, their offers are more likely to be accepted or can go into a better negotiation.
At MHC we believe our clients turn to us for guidance, local market knowledge and marketing expertise, and most importantly, reassurance as they embark on their home buying or selling journey. To learn more about how we can be of assistance to you, let’s schedule time to talk soon.