The one constant of the real estate industry is that it is always changing. The industry can be transformed from new lifestyles, emerging trends, economic change, and even advanced technology. As we embark on the new year, there have already been some major changes in the works. From new investment opportunities to shifting property values, here are the upcoming changes for the real estate industry in 2019:
As technology continues to advance and transform the world around us, artificial intelligence (AI) is becoming a vital tool in the real estate industry. Not only is the technology cost effective, but AI also possesses the power to collect and store incredible amounts of data. AI can use this data to determine the market value of the property and even predict market trends by assessing the collected data. Real estate investors and developers see the immense value of AI in the industry, which is why we will be seeing more of it in 2019.
Although the use of advanced technology in real estate offers a competitive edge in the industry, it can also take away from business relationships. When the public learned of Facebook manipulating people during the election, there came a push for more human interactions and less of technology. As a way to make real estate more personal again, it’s predicted that the industry will become more about the people and less about the sale. This will lead to building longer business relationships and forming a stronger network.
The industry will be seeing more millennials than anyone buying real estate this year, even with the rising rates. Many millennials will be entering into their late 20’s and early 30’s, which is the prime age to buy their first home. According to Danielle Hale, chief economist for Realtor.com, millennials will account for 45% of mortgages and take up the majority of buyers this. Many of them will be first-time home buyers, even though the mortgage rates are rising and housing has become less affordable.
Renting vs. Buying
As mortgage rates continue to rise, many potential buyers are choosing to continue rent instead of buying a home. The 30-year, fixed rate mortgage will be reaching 5.8% in 2019, which is turning off most buyers. Unlike mortgage rates, rental rates have seen little change within the last few years. This has been encouraging more and more potential buyers to put off buying home longer. As more people continue to rent, the real estate industry will also begin to see more investments in apartment construction.