The real estate market this year is certainly experiencing a shift as compared to earlier years. After coming off a time period of low inventory combined with low interest rates it was the norm to have multiple offers on nearly every home that was on the market. Despite the market cooling off a bit, some emerging trends have been cited as many feel this year may be better or the same as last for property investment. Here is a closer look.
Smaller Homes Offer Big Appeal
Now that things have loosened back up since the pandemic buyers are not seeking such large homes as much now that schools are open and people are back at the office. Smaller, luxury homes are becoming more popular as they have been selling more quickly than larger ones. Luxury buyers also like to purchase in cash so smaller homes may be more appealing with lower costs.
In the previous time period of buyer frenzy where bidding wars got out of hand, sometimes it became a goal of winning the bid rather than getting the best deal or house. This led to many buyers having remorse over their purchase decisions. This may make some luxury home buyers decide to move.
International real estate transactions are back on the upswing. Foreign buyers are attracted to U.S. housing and vice versa. According to the National Association of Realtors (NAR) top international buyers in the U.S. are China, Canada, India and Mexico respectively.
Many people still feel that real estate is still a safe bet for long-term investments. Real estate can diversify a portfolio, offer a long-term investment, generate income with investment properties and act as part of an inheritance for dependents.
With interest rates higher than before buyers seek alternate financing options and the wealthy are leveraging cash in real estate. Cash deals are expected to be on the rise with increases seen by NAR data over previous years.