The real estate investment world is filled with statistics, trends and predictions. Who's buying? Where are they living? And, equally important, what are the trends that will shape how you invest in real estate?
Here are 20 stats and trends to keep top-of-mind as you plan your strategy for 2020:
1 - The housing market is heading into a correction. Homes will stay on the market longer and fewer bidding wars will occur.
2 - Older millennials will start buying homes. In fact, a quarter of them are planning on buying a home in the next 12 months.
3 - That trend has given rise to the term Hipsturbia, hot suburban spots outside of big cities.
4 - Affordable housing has become a major topic of discussion, with even Google and Microsoft pledging to tackle the challenges.
5 - As the population ages, alternatives for older demographics will increase. By 2035, 79 million heads of households (one out of three) will be over 65.
6 - What's inside homes? Technology will be critical in creating the "tenant experience," as the Internet of Things devices will become commonplace.
7 - "Space as a service" (co-working and co-living) has become commonplace.
8 - House flipping is back up to the highest level since 2006, but current flips are less risky than in the past.
9 - The average gross profit on a flip this year was $62,700 — a 39.9% return on investment. That margin has been steadily declining. (40.9% gross return in first quarter 2019 and 44.4% return in the second quarter of 2018).
10 - Real estate inventory has been dropping, especially at the low- and mid-priced levels.
11 - Home prices are expected to rise more slowly (nationally) in 2020 than in 2019.
12 - A 2.3% gain is expected in total existing-home sales. New home sales are anticipated to rise by 1% in 2019 and an additional 4.5% in 2020.
13 - At the high end of the market here's what's happening: Homes over $750,000 grew by 4.7% year-over-year in September, but rising demand could lead to drops in inventory as soon as February 2020.
14 - Multi-family rent growth is expected to be at about 6% in 2020.
15 - More good news — lending for multi-family properties is expected to reach an all-time high.
16 - Texas will be the hottest market next year, driven by growth in Dallas-Forth Worth and Austin.
17 - U.S. real estate investments are drawing interest globally.
18 - Deloitte declares that "location, experience, analytics" will be the mantra for 2020. Tools like these will become invaluable in assessing market and neighborhood potential.
19 - Not only will technology improve tenant experience and boost home values (see #6), it is also turning real estate investors into trend and insight gurus. They will be able to analyze market potential at a granular level — immediately. Automation will also be a vital competitive advantage in marketing. Outreach to sellers and prospective buyers will be simplified and expedited via marketing platforms like this.
20 - Technology will have an impact on every aspect of real estate investment. VC funding of proptech companies reached an all-time high in 2019. If you missed the memo on the technology disruption of our industry, 2020 is the year to catch-up! Big data has finally arrived on our small devices, leading to better real estate investment decisions.
How will these trends affect your strategy in 2020? Partner with Propstream for all the tools and technology you need to succeed in a changing market.
