Sue and I spent the month of January gearing up for another busy year in real estate! I went to New York City for a few days for the Inman News Conference, a gathering of Realtors specifically focused on the tech and marketing sectors, hitting on topics both inside and outside of the Real Estate industry. Meanwhile, Sue headed to Las Vegas for a Top Producers gathering for our Luxury Portfolio International group. She met with our colleagues from the group from around the world, networking and sharing best practices for marketing our listings. She even met a Realtor from Argentina who specializes in selling wineries. Not a bad gig! But, I digress…After sharing our takeaways from these two amazing conferences, we realized both groups touched on many of the same trends and topics for where the real estate market is headed in the coming months. We’ve distilled all of the info and have come up with our predictions for the 2018 real estate market.
The New Trends in the 2018 Real Estate Market
BIOMETRICS – Biometrics is the hot new trend du jour. If you’re not familiar with biometrics, you can get a quick primer here . The example most of us have heard about is the new iPhone which unlocks with a quick scan of the users face. You may also have seen the CLEAR line at the airport, which is replacing TSA Pre-Check as the fastest way to get through security. All you have to do is scan your iris’ and fingerprints and you’re Clear! No boarding pass, no photo ID. Clear’s CEO was at the conference and gave her insights into why biometrics will be coming to a home – or home search – near you soon. In Miami, there is a new construction building that uses biometrics instead of a key to unlock the door to the building, as well as allow you into the elevator with a quick scan of your eyes! It’s truly the stuff of a spy thriller and we’re interested to see how it will be integrated into our daily lives at home.
ARTIFICIAL INTELLIGENCE (AI) – Artificial Intelligence is also no longer the stuff of movies. There are several AI products on the market which allow you to send lifelike text message responses and have actual conversations with another person based on machine learning. One broker even predicted that there will soon be a day you can have a conversation with a for sale sign in the yard – asking it questions as to the amenities of the home inside. How far down the line is this development? It’s not clear, but it is definitely a trend that is being quickly developed and will be mainstream before we know it.
25-49 YEAR OLDS ARE THE NEW AFFLUENT –While the over 50 crowd still is an important part of the market, it is the younger generation that will drive the real estate market in the upper brackets going forward as their surplus funds are going right to the housing market. On the other end of the spectrum, the over 50 crowd is downsizing and spending money on meaningful experiences and travel. They are looking for comfort, security, and relaxing atmospheres and tend to be moving toward family. In fact, these are the folks “gifting” their wealth to the 25-49 year olds (dubbed “The New Affluent”). They are a group to be acknowledged and listened to if you own a home in the million plus range and plan to sell in the future. You can read more about how to appeal to these buyers here. These buyers have also been educated in wealth. Instead of the Ozzie and Harriet and Donna Reed households the Baby Boomers watched on TV, this group has seen how the wealthy live through countless television shows and reality TV. The amenities in homes they are looking for include dining room space since they tend to be “foodies,” fitness rooms, privacy and entertainment space, particularly outdoor space.
THE “WANT IT NOW” ECONOMY – When consumers want things in today’s society, they want it now! With the rise of Netflix, Amazon, Uber, Lyft and other on-demand services, consumers are looking for ways to streamline all parts of their lives. The real estate process is notoriously difficult and cumbersome (though with us, it doesn’t have to be!), so many startups are looking for ways to revolutionize the real estate industry. On-demand showings or door opening apps are in the works, though the jury is still our on how the safety of these products will come into play.
The New Norms of the 2018 Real Estate Market
BIG DATA & DATA MINING – Many of us have heard the story about Target figuring out a teenage customer was pregnant before she had a chance to tell her family. These products have become fine-tuned and mainstreamed. Businesses can market to people on social media based on their purchase history, economic background, and location. This has been going on for a while, but the big changes are coming with programs that can predict when people likely to buy or sell real estate (and presumably make other big decisions). Marketing will be more targeted than ever, for better or for worse!
SMART HOMES – We all know about Alexa, Google Home, Nest Thermostats, Smart Bulbs, Ring and Roomba. They are old news! In fact, you can check out an article I wrote about the latest in smart homes after this same conference two years ago. However, instead of being a cool new trend, they are now in a very large percentage of the homes in our marketplace. It’s become something that people expect and it’s actually easier to use them than you would think. If you want to easily make your house a smart house, we’ve got you covered. If you want to take things a step further, you can even get smart appliances in your home now.
LOW INVENTORY – Across the country, Realtors are sharing that there is an inventory problem, meaning there are not enough homes on the market to meet the demand. But, that doesn’t mean that it is always a seller’s market. The homes that are priced well and show well are selling quickly, while homes that are overpriced or show poorly are still languishing on the market. This is related to both discussions of the on-demand consumer and the newly affluent, where buyers expect things to be done and done to a high degree of quality – but that also meets their specific tastes. Either way, inventory is reportedly low across the country and there are no signs of that changing anytime soon.
LUXURY AT ALL PRICE POINTS – Before the advent of real estate websites, luxury homes were shown without photos or advertisements. You needed to provide financials before setting foot in the door. Now buyers at all price points can view and take video tours of homes in the $100 million price range on a variety of websites (www.luxuryportfolio.com is an example). That means that first-time buyers are able to replicate luxury styles in their homes with furnishings, paint treatments, home theatres and outdoor spaces.
The New Political Climate & It’s Impact on the 2018 Real Estate Market
THE NEW TAX LAW – Curious about the new tax law and how it impacts you? Check out our article on the real estate changes from the new tax law here. So far, we haven’t seen much of an impact however that may be changing as we progress through the year and the changes set in.
RISING INTEREST RATES – More than the new tax law, we are seeing the very real threat of rising interest rates spurring buyers into action. Predictions show that rates are likely to rise based on a rising economy and government borrowing.
THE STOCK MARKET – What is up with the stock market? Likely, an overdue correction. Stocks have been on the rise for the last few years and the recent volatility is likely just a sign of evening out. Either way, there will be a lot of people feeling “rich” and more investors in the market due to the new tax law benefits for investors.
The Bottom Line on the 2018 Real Estate Market
So far the 2018 real estate market is off to a roaring start. From what we’ve gathered, 2018 is likely to be bullish and continue through to Spring 2019. If you would like to discuss what all this means for you and your real estate please contact us at (703) 363 – 3221 or email us at firstname.lastname@example.org. We are happy to meet for coffee to discuss.
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