Being a successful real estate professional is not solely dependent on customer relationships or the ability to close a sale. The competition in the real estate market can be stiff, so knowledge of developing market trends is vital to your advancement in the field. To help your business head into the new year strong, here are 8 upcoming trends that every real estate professional should be familiar with in 2015.
Mortgage rates are expected rise slightly.
In 2014, mortgage rates were steadily declining. 30-year mortgage rates began the year near 4.50 percent, according to Freddie Mac’s weekly mortgage rate survey; and ended the year near 3.75 percent. While this trend is expected to reverse direction, with rates slowly increasing in 2015, more people may qualify for home loans as issues like foreclosures or short sales age out of their credit reports and Freddy Mac and Fannie Mae ease mortgage eligibility.
There will be an upsurge of millennial buyers.
Many millennials have postponed homeownership in favor of renting, but that’s predicted to change in 2015. Contrary to popular belief, not all millennials are living with their parents or struggling to pay off student loan debt. In fact, their employment prospects are improving and older millennials are now looking to buy a home of their own.
Inventory will increase.
During 2014, the lack of houses for sale significantly affected the real estate market. However, there have been signs that available home inventory will be on the upswing during 2015. Though 2014 experienced low inventory, there were more new listings for most months of 2014 compared to the same month the year prior.
There will be an increase of foreign investors.
In 2015, foreign investment in U.S. real estate is expected to spread across dozens of markets. International buyers will expand their long-standing tradition of investing their wealth into U.S. real estate, but they won’t limit it to Miami and New York as they have in the past. Instead, international buyers will be extending their reach to markets in places such as Phoenix, Houston, Dallas and Hawaii, which will become hubs for foreign-owned apartments and hotels.
Credit scores will continue to be a major factor.
Strict mortgage qualification standards are preventing many home buyers, especially younger ones, from buying a home with a bank loan. This situation has remained the same since 2010, however, it’s possible that various new federal housing policy initiatives might help loosen those standards in 2015. Opening up access to credit would be a game changer in the housing market, allowing thousands of potential home buyers to achieve the dream of homeownership. Take our course, A Home Buyer’s Guide to Credit Scores, to learn how you can coach home buyers on their credit score.
Foreclosures will continue to decline.
As many real estate professionals know, home foreclosure activity spiked when the housing market crashed. But a couple years ago, foreclosure filings began to decline. This downturn in foreclosures signaled the return of normalization within the real estate market and for the broader economy as well. In 2015, it is predicted that foreclosures will continue to decline, which should help the market continue its post-crisis healing process.
Technology will be increasingly involved in the buying and selling process.
As technology evolves, the process by which people buy and sell homes continues to develop as well. While real estate professionals still open doors and show homes, that aspect of the profession has become less time consuming with the integration of technology. More time is now spent in arranging the deal and shepherding it through to completion. In 2015, that trend is predicted to accelerate as more mobile devices equipped with tools such as augmented reality, which allows potential buyers to explore homes on their own.
Gas prices could affect the housing market.
The current drop in gas prices could carry over into the housing market in a small way. Gas prices fell for 88 straight days between Sept. 25 and Dec. 22, according to AAA, to a national average of $2.39, down 85 cents a gallon from a year ago, resulting in a savings of about $450 million a day for consumers. If lower gas prices do last for over a year, they could potentially help entry-level home buyers to afford their dream home.
Have you noticed any other real estate market trends emerging in 2015? Let us know in the comments below.