If your considering buying, selling, or even investing in real estate this year, you may want to consider these trends.
Can you believe we are already a few months in to 2022?? I am amazed at the whirlwind of year it has already been for real estate.
The increasing mortgage rates have not deterred buyer demand, in fact, 3 in 4 buyers end up in a bidding war.
Alas, that is only a snippet of what is going on in the fascinating world of Real Estate. Getting ready to buy, sell, or invest soon? Here are 5 trends to look out for this month.
1. Declining Affordability
If you have been keeping up with the real estate market over the last couple years then you have noticed the increase in home prices. Now, couple these rising home prices with increased mortgage rates and the affordability of housing decreases.
Renters aren't free from the burden of rising prices either. While renters do not benefit from the rental inflation, buyers and investors could take advantage of the market by purchasing Multi-Family buildings and renting out the units at a premium.
2. Virtual Real Estate - Metaverse
Metaverse Real Estate is the next big thing. It can be a great way to invest even though you may not see an immediate return, there are ways you can monetize your investment, sooner than you think. You can choose to rent your virtual real estate in the metaverse, rather than holding it and waiting for a buyer. This option could be beneficial for companies that are interested in getting their foot in the door, but not ready to fully invest.
3. Crypto Mortgages
Milo is the first crypto-backed mortgage product allowing buyers to use their crypto to buy their first home. These loans require no credit check, down payment, or tax returns. Loan terms are generally 30 years. Milo has a long wait list of buyers and has already issues over $400 million in loans. Of course, there are other companies with similar products in line. Ledn just raised over $70 million for their first mortgage program using bitcoin.
4. Cash Offer Solutions
In this competitive real estate market, cash is king. If you can make a cash offer on a property, your chances of winning the offer are much higher than someone with a loan.
Cash-offer solutions are an up and coming trend (especially for people who do not have access to $400,000 in cash). These companies make cash offers on the buyers behalf and then rent the home to the buyer later while they apply for financing. Some companies even act as the lender. Companies that offer these Cash Solutions include: Ribbon, Accept.inc, Orchard, and Opendoor Technologies.
5. Changes in New Construction
We are finally starting to see some gains in new construction these last few months, but there is one thing that is notably different, their size and type. New homes are getting bigger, according to the National Association of Home Builders. It isn't surprising that since the pandemic homes are being built larger, likely to accommodate the ability for families to work from home. The average square footage is up nearly 6% compared to last year.
Julia Ried - Realtor®
Re/Max Gold
jried.remax.com
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