Ten years ago, when the global economy has only just begun to recover from the last economic crisis, the real estate market was in a big crisis too. Many people who have bought their homes before the Great Recession were in big problems with loans and mortgages. The prices of homes were falling, while the monthly cuts kept rising.
Today, we are finally at the same level as it was before the recession and the prices of homes are now more stable. However, even today we have many challenges that are affecting the real estate market. There were many changes in this industry in the last ten years. Also, experts in this market, such as UpNest, are more aware of those challenges, and now they are capable of providing much better service to people who want to buy or rent any type of estate.
The understanding of all the changes in the real estate market and what causes them are very important because that is the only way to make some conclusions about what will be waiting for us in the future. In this article, we are going to introduce you to some of the most important changes in the real estate market in the last decade.
The Economy Became Stronger
First of all, there is a much smaller unemployment rate than it was ten years ago when the economy only started to recover from the crisis. When we say it in numbers, it doesn`t look like so drastic difference, because today the unemployment rate is around 4 percent, while it was 5 percent 10 years ago, but that 1 percent represents thousands of workers.
Since there is a bigger need for qualified workers today, the wages are also higher, which leads to a better possibility of getting a mortgage for a new home. However, there are still many problems that could affect the economy, like the current trade war between the United States and China, or the possible need for a total quarantine because of the spreading of Covid-19 virus, but the global economy is surely more stable than it was ten years ago.
Technology Advancements and Real Estate Market
The best example of how the technology made a huge impact on real estate is the Airbnb, and other similar platforms, where we can easily find an apartment for competitor price. Also, there is a much smaller need for real estate agents to go and show people the apartments since we can see every part of the house online, and agents have to adapt and work more like office workers.
Furthermore, there is a great expansion of smart homes, which represents one of the most popular trends, and we expect that there will be the implementation of this technology in every home in the future.
It is Much Easier to Buy Estates
The Internet was widespread ten years ago just as it is today, especially when we speak about advanced countries like the United States. However, there was still a need to find homes more traditionally, with the help of an estate agent. Today, people usually don`t feel the need for an agent, since they can see the house online, along with all specifications.
There are many websites where you can easily find a house or apartment, and that is the main reason why estate agents have to adapt and work online, they are the ones who are posting ads, but you can also do it all by yourself. On the other side, you will still need an agent if you want to go and see the house that you are interested in.
The Widespread of Institutional Investors
After the crisis, people were much more interested in renting their homes, instead of taking a risky mortgage, which leads to the rise in popularity of institutional rental investors. Actually, the rental investors were one of the rare who had benefited from the recession, since they managed to buy rental homes for much cheaper prices.
Another reason why there is such popularity of renting homes from these investors is that the younger population is not so interested in buying new estates since they find renting more sustainable. Also, the great part of renting one of these homes is that the investor is responsible for maintenance and upgrades, which is very attractive for someone who doesn`t have so much spare time to fix stuff in their home.
It Was Easier to Get a Mortgage Ten Years Ago
During the Global Recession and few years after that, we all learned that it is not so smart to take a mortgage at any conditions, and both banks and people learned it in a hard way. The standards today make it harder to get a mortgage since banks are now much more careful while they are deciding if anyone is capable of paying the mortgage.
The Occurrence of Crowdfunded Real Estates
While it was not imaginable ten years ago, there is a trend of crowdfunding today, which leads to around 20 percent cheaper homes, but the investors get their share in the part-ownership of your home. The investor gets his share when you decide to sell that estate.
Online Reviews of Real Estate Agents
Today, it is easy to find the right review for almost anything that you are interested in. The same is with real estate agents, that you could check on their website or some forum about estates. The existence of reviews is motivating the agents to get their communication on a higher level, and always be capable of making the best solution for both the seller and the buyer of some estate.
People are More Educated About Real Estates
With the global use of the internet, you could find almost every information that you need. When you are interested in buying some estate, you can easily find out what is the basic pricing of homes in that area, and find the home that you are interested in online, and see all of the specs about it.