5 Real Estate Trends in 2016
Every year we get new trends in areas like fashion, entertainment, business, and, of course, real estate. With the housing market bouncing back due to economic growth and an increase in employment opportunities, more people will be able to afford to buy their first home or move into a newer home. Buyers should stay on top of the latest real estate trends if they're looking to take advantage of a good deal when purchasing or selling their home because the housing market can change as frequently as the seasons. Check out these five real estate trends in 2016.
1. Younger Buyers
Real estate in 2016 will be the year for Generation Y and Millennial homebuyers. Realtor.org reports that these younger generations make up the largest share of homebuyers at 32%, which is more than all Baby Boomers combined. And 68% of Gen Y buyers are part of the largest group to be first-time homebuyers.
2. New Home Growth
Although 2016 shows a steady and healthy growth in real estate, it will be a bit slower than in 2015. The housing market feels like it's back to normal after so many years of the roller coaster fluctuation from the housing crisis. Buyers will notice more new construction homes making a comeback because of low inventory of resale homes. Real estate experts are forecasting an increase in new construction homes with prices at reasonable rates in a stable market that will attract more buyers. Also, builders who bought land at low prices after the real estate crash can now use that land to build a variety of new plan homes and offer better price points.
3. 18-Hour Model
You may or may not have heard the term 18-hour city, but this emerging trend is happening across the U.S. Urban planners and investors are developing areas into thriving 18-hour, and even 24-hour, neighborhoods where the availability of amenities and services are offered, similar to larger, metropolitan cities. And because of the late-night amenities and more variety in entertainment, these areas are attracting younger buyers who want to experience the downtown lifestyle without having to pay downtown prices. Places like Greenville and Charleston in South Carolina have adapted their downtown areas to this model, drawing a crowd that one would typically find in their more urban counterparts.
4. Not Your Typical Suburb
People typically associate the suburbs with cookie-cutter homes, chain restaurants, and lack of variety and diversity. But the latest trends show that investors are replicating urban charm and amenities into a few suburban neighborhoods. Research has also shown that Millennials will eventually move away from urban areas and into suburban and outer neighborhoods that have good public transportation, walkability, entertainment, and amenities that they have grown accustomed to in their urban settings.
5. Buying vs. Renting
A survey conducted by Freddie Mac found that seven in ten people think it's cheaper to pay rent than to pay a monthly mortgage. People believe renting is a better option because it fits their budget and lifestyle, but an underlying factor is that many of them also feel that saving for a down payment for a home is overwhelming. But studies have shown that purchasing a home was cheaper than renting in almost every large metropolitan city in the U.S. Another trend is that rents will go up more than home prices, driving more people to trade in the lease for a mortgage.