4 long-term trends that are transforming real estate
Recent moves in the real estate market are driven by rising home prices and historically low-interest rates. But we also see long-term trends that are progressing slowly, but surely.
You'll be prepared for any challenge that may come your way in the near future if you keep an eye on these shifts and use them to your advantage.
1.Younger generations are slowly dominating the market
A few years ago, Millennials (1980-1998) were the new kids on the block, purchasing homes as first-time buyers. Now, as 2022 approaches, the oldest members of Gen Z (1999-present) are making their own mark as well.
Millennials and Gen Z accounted for 39% of all homebuyers according to the National Association of Realtors (NAR) 2021 generational trends report -which is a greater share than the generations that come before them (also known as Gen X, the Boomer Generation, etc.)
Here’s a breakdown:
- 23% – Older Millennials between the ages of 31-40
- 14% – Younger Millennials between the ages of 22-30
- 2% – Gen Zers who are 21 years or younger
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2. Suburbs and small cities will continue to grow
The pandemic has reshaped the way people work and live. In the beginning, city dwellers sought out suburban housing for more space and a cheaper price, while seeking work-at-home opportunities.
The NAR Economists’ Outlook observed that urban areas across the nation continue to experience more outbound migration. During the first half of 2021, rural areas were the top source of inbound moves at 54.6%. Cities, on the other hand, captured 48.5% of moves, a slight increase over last year.
In the NAR Economists' Outlook for 2016, it was noted that urban areas throughout the country continue to experience increasing outbound migration.
3. Development of public open spaces will ramp up
According to The Trust for Public Land, a 501(c)(3) nonprofit organization, it takes more than 10 minutes for about 100 million Americans to access a park. This issue was magnified during the first phase of the pandemic, when lockdowns were widespread, and people were unable to venture too far from their homes.
While restrictions have eased since then, social distancing and the necessity of well-ventilated spaces will remain as new varieties emerge.
Taking steps to create more parks and open public spaces will be essential for making people feel less isolated as they face new threats.
4. Climate change will become a factor in real estate
Climate change is impacting more industries than ever, and real estate is no exception. Buildings and structures account for more than 40% of the world's greenhouse gas emissions and energy usage.
The industry is increasingly aware that it needs to take serious action to ensure building design and raw material sourcing are sustainable. As a result, market preferences are changing. Young homebuyers - Millennials and Generation Z - are becoming more aware of how their actions affect the environment.”
It's imperative to have an agent with extensive knowledge of the Chicago and Suburban Illinois real estate market on your side during these times of change. With United Realty Group, you’ll have access to the best agents who can help you make an informed investment decision.