“New normal” is a phrase we’ve become familiar with in this post-bubble real estate industry. It describes the current landscape of home prices that are lower than their peak but still healthy and steadily rising, stricter lending standards, and continued low (albeit slightly rising) interest rates.
But if you think about it, the term “new normal” really just connotes a recent change. I should know, I just had a baby five months ago – believe me, I’m living in a new normal.
So I’d like to point out another new normal: the situation of the Millennial generation.
I’m sure you’ve read reports saying that many young adults are putting off buying a house because they’re strapped with college loan debt (which, the New York Times aptly points out, is due to rising tuition costs outpacing income levels, among other reasons). More Millennials are returning to their parents’ homes after college to save money. They’re delaying both marriage and starting a family. Many of them are still trying to decide if they ever want to get married and/or have children.
But what else do we know about Gen Y?
Yes, they have higher student loan debt than previous generations, but they’re also more highly educated. According to the U.S. Bureau of Labor Statistics, 66.2 percent of 2012 high school graduates are enrolled in colleges or universities (71.3 percent of young women and 61.3 percent of young men), as compared to 61.7 percent of grads who went to college in 1992 and 49.2 percent 40 years ago. More are seeking higher post-graduate degrees as well. And overall, Gen Y has less debt from material items than older generations, shying away from credit cards and fancy cars.
There’s also one more thing we know about Millennials: They love houses — or at least the idea of a owning a home of their own. Continue reading »
When we look back on 2012 a long time from now, it may be viewed as the first year of the recovery, the year in which real estate reversed its course and moved in a more positive direction.
With that in mind, here are 13 reasons — courtesy of REALTOR® Magazine’s online news — why real estate pros can look forward to next year:
1. There’s greater optimism about increasing home values.
2. More new households are forming.
3. Home shoppers are feeling a greater sense of urgency.
4. Home ownership remains a goal of members of the Millennial generation.
5. Foreclosure starts are falling to pre-housing-bust levels.
6. Interest rates should remain low through next year’s selling season.
7. Loan demand for home purchases is climbing.
8. More Americans say it’s a good time to sell.
9. The number of improving housing markets is going up.
10. Job creation is expected to provide a much-needed boost to the commercial sector.
12. As housing values rise and equity returns, fewer home owners are underwater.
13. Real estate is contributing to an overall economic recovery.
That’s not to say there aren’t challenges. Lending remains tight, there’s a large foreclosure backlog, and regulatory challenges and the fiscal cliff loom ahead. But on balance, real estate appears to have a bright future in 2013.
Miami is known for its colorful vibrancy, but 23,000 vacant condos put a dark cloud over the south Florida market at its peak inventory in 2008. Do you know what happened? They’ve all sold — largely due to the purchasing power of international investors.
As foreign buyers’ interest in U.S. real estate continues to surge, REALTORS® are seizing this opportunity and arming themselves with education.
A window into this trend could be seen in Chicago this week as about 20 REALTOR® students, some who traveled from several states away, attended the Certified International Property Specialist (CIPS) course at the Chicago Association of REALTORS®. I had the pleasure of sitting in on the first day as instructor David Wyant of Wyant Realty and Across Borders School of Real Estate in Ormond Beach, Fla., covered local markets. CIPS is a real estate designation that has seen exponential growth, with more than 2,000 recipients and courses taught in 50 countries.
Why are foreign buyers eyeing the U.S. real estate market?
Is it because the value of the dollar has fallen? Yes, the lower dollar value equals deals for foreign buyers. But according to Wyant, that’s one reason among many.
“Investing in real estate is great for individuals and for sovereign nations,” Wyant explained. “Real estate has its ups and downs, but it’s never worth nothing. It’s tangible, it holds its value and it’s around for a long time.”
Of all the countries in the world, the U.S. is still leading the way in providing the most stable and secure real estate investment environment, above Germany, Canada, France, Australia and the UK. Why? The stability of the economy and laws the U.S. has protecting private property rights. “That means a lot if you’ve ever had anything taken away from you,” Wyant said.
The internet has helped quicken globalization. It’s led to the migration of jobs across borders, and as countries evolve and economies diversify or move from farming to industry, creative centers have emerged and trade has expanded. Sunsetting tariffs, 24-hour markets, ease of air travel, and countries specializing in specific industries and trades have all contributed to globalization.
Who’s buying in the U.S.? Continue reading »
Sixty-one percent of first-time buyers who made a downpayment on their home pulled that money from savings, and 22 percent received a gift from a friend or relative, according to the 2009 National Association of REALTORS® Profile of Home Buyers and Sellers. Six percent received a loan from a relative or friend, 6 percent tapped into a 401(k) fund, and 6 percent sold stocks or bonds.
Wherever buyers get downpayment funds, that money makes a big difference in how much of a mortgage they can afford. Help buyers understand that calculus with these tips from the June “Get Ready to Own” bundle now available at the REALTOR® Content Resource: Continue reading »
By Brian Summerfield, Online Editor, REALTOR® Magazine
What does it say about a neighborhood or city if the people living there were more likely to rent the Coen Brothers’ satirical film “Burn After Reading” than the classic popcorn flick “GI Joe: The Rise of Cobra”? More to the point, could it be useful in determining local consumers’ tastes in other areas, such as residences?
The thought occurred to me as I was checking out a new feature on The New York Times Web site that allows users to search the top movie rentals of Netflix customers by zip code in 10 metro areas. Continue reading »
By Erica Christoffer, Contributing Editor, REALTOR® Magazine
Several bits of news have popped up in the past week, reminding us just how significant real estate Web sites have become in today’s market and in today’s online culture.
Last Friday, Time Magazine released a list ranking the 50 Best Web Sites of 2009. Several real estate-related sites made the cut.
This, coupled with recent findings published by the Nielsen Company that shows traffic to the top U.S. real estate Web sites is up, points to the continued growing interest in real estate on the Web. Continue reading »