Crucial 2018 Real Estate Trends
The new year will undoubtedly usher in new developments and trends in the world of real estate. Because we live in an age of proliferating technological capabilities and ever-fluctuating markets, the ways that we conduct real estate transactions are constantly evolving. Thus, it can be difficult to project what might be in store for those looking to purchase Kailua Kona homes for sale in 2018.
The unemployment rate is currently the lowest it has been in the past 17 years. Wages are projected to increase as scientific advancement demands more employees with refined technological skills. Companies will continue to invest in new services and technologies to broaden their markets. Despite ongoing sociopolitical turmoil, statisticians project that the economy will continue to grow throughout 2018. But what are the implications for the real estate market?
If you are buying or selling Kailua Kona homes for sale, there are multiple social and economic projections you should consider as you refine your sales practices in 2018.
Up, Up, Up
Generally speaking, 2018 will be characterized by growth. The number of houses on the market, home sales, and housing prices are all expected to increase.
2018 will witness a decrease in the severity of the current housing inventory shortage. Although demand will continue to exceed supply, the number of properties on the market will increase more rapidly than demand.
Realtor.com predicts that housing prices will increase by 3.2% in 2018. Thus, home prices may rise, but they will rise by a lesser margin than they did in 2017. The increase in inventory and reduced rate of price increase will remove barriers to many cash-strapped homebuyers. Indeed, home sales are expected to increase by 2.5% this year.
It is critical to account for these factors when pricing Kailua Kona homes for sale. Though demand will remain high, reduced barriers to those with financial constraints will create more competition in the market. Keeping prices competitive will thus require maintaining a careful watch on the market, as the countering forces of increasing supply and increasing demand continue to influence housing costs.
Affordable Kailua Kona Homes for Sale
Keeping up on market trends is critical not only for ascertaining prices, but also for determining the proper areas in which to invest. The housing inventory shortage of 2017 has generated a significant demand for modestly priced single family homes. These types of homes are attracting more potential buyers than any other segment of the housing market.
Those looking to invest in Kailua Kona homes for sale may be better off foregoing larger properties and instead investing in affordable and practical rental units and mid-market homes. There will remain a market constituency of wealthy retirees seeking luxurious properties. However, demand for these properties will not increase as sharply as it will for affordable family homes. Agents, too, will find profitable opportunities working with affordable housing startups as they emerge.
Real Estate Investment and Short-Term Rentals
Short-term rentals through online services such as Airbnb.com have witnessed incredible growth in recent years. In 2018, online rental services will continue to expand, solidifying their presence in the global marketplace.
Short-term rentals allow owners of both larger properties and small family homes to capitalize upon spaces they infrequently use. They are also an excellent opportunity for real estate investors, who are beginning to buy or rent homes for the creation of online rental services. These “online hotels” profit investors and protect landlords, as investors assume the care and ensuring of the property.
The growth in short-term rentals poses an incredible opportunity for current owners of Kailua Kona homes for sale. Because Kailua Kona is a premier tourist destination, hotel and rental prices are steep. Thus, demand runs high for fairly priced short-term rentals, particularly in areas close to beaches and shopping districts. Sellers have much to gain in time and expenses by instead renting their properties short-term or renting to investors running online hotels.
Due in part to the growth of short-term rentals, real estate investment will flourish in 2018. Those with Kailua Kona homes for sale will be more likely than ever to consider selling to an investor instead of a prospective homeowner. Real estate agents can expect competition from investors to increase markedly, and investors can expect to gain traction in the real estate market.
Evolving Living Arrangements
Unfortunately, we live in an age of accelerating environmental degradation and rapid population growth. Millennials, who will come to bear the brunt of such concerns, are increasingly entering the market as first-time homebuyers. Thus, demand for economically and environmentally viable real estate will increase in 2018.
Housing prices in densely populated metropolitan areas are growing ever steeper. Millennials entering the job market to work for large companies in these cities are finding it impossible to afford housing close to their workplaces. Cash-strapped Millennials are therefore expected to enter the market for suburban housing in nearby commuter areas. Those who wish to remain in cities will be seeking smaller apartments. Operating income on apartment stock is thus projected to increase accordingly.
Demand will also increase for economically feasible co-living arrangements. Thus, landlords may simultaneously rent single units to multiple tenants. Methods of conducting real estate transactions must evolve and adapt to the modern inclination toward community living as sellers and landlords strike deals with multiple renters and buyers.