Each year, millions of homes are bought and sold in the United States, and investors review data released for the housing market value. If you are curious about the housing market or considering investment, here are phrases that you should understand about housing market value.
Median Sale Price
When you look at the median sale price for homes in the country, the data will show a dollar amount and a percentage of increase or decrease. The median price can be viewed as the average. In June 2021, the median sale price was just under $390,000, demonstrating an almost 24% increase compared to last year. Use the median sale price of homes to determine if the housing market is affordable for buyers and profitable for sellers.
Average 30-Year Fixed Mortgage Rates
Fixed mortgage rates reflect the cost of buying a home, typically shown as an interest rate. Higher fixed mortgage rates coincide with a downturn in purchases because people cannot afford the higher monthly payments. When the mortgage rates decline, you will see more people buying homes. In June of this year, the average rate for a 30-year fixed mortgage was 3%, compared to almost 5% in 2018 and 2019.
Median Days on Market
Median days on the market show you how fast properties sell once they are listed. This means that buyers have to act quickly to get the home they want and can afford, and sellers can expect to get out of their properties sooner or later. The average time that it took to sell a home in June 2021 was 14 days, indicating that it is a highly competitive market.
Months of Supply
Months of supply is based on the number of homes that are listed for sale compared to how many people are looking to purchase a home. As of June, there is a little more than one month of supply of homes on the market. This is significantly lower than past years. In 2019, there was a supply of homes for sale that would satisfy buyers for four to five months.
Sale-to-list price indicates how much the actual sales price was above or below the original listing price. In highly competitive markets, buyers may offer a price that is more than the list price to ensure that they get the home they want. The sale-to-list price is lower when there is little competition or the home’s actual value is below the asking price. In June of 2021, the average sales price was slightly more than the asking price.
Commercial real estate is closely related to residential property. So, many professionals still get confused when trying to tell the differences. Many property buyers remain uninformed about changes that are occurring in the real estate industry. Becoming a better buyer or seller starts by understanding the fundamental aspects of the industry.
Understand the Basics of Commercial Real Estate
Many commercial real estate owners lack a basic understanding of the business in which they work every day. Some investors continue to work for years without knowing all of the differences between commercial and residential properties. For instance, operating, repairing and maintaining a commercial property is more stringent than running a residential building. The work may require undergoing additional legal procedures along with additional paperwork and longer wait periods.
Think Like a Professional
Every commercial real estate buyer or investor must think like a manager or owner does. To reach professional levels, the buyers must do at least a year of research about commercial buildings and continue their education indefinitely. It’s important to become fully knowledgeable and confident to the point of knowing how to educate other people on the same topic.
Review Industry Trends
Within one year, the real estate industry can undergo several, major transformations. Each year, there are industry trends that affect the types of commercial properties that people buy or invest in. During a pandemic, investors may stop supporting restaurants altogether and invest in retail or grocery stores. Overall, if someone does not know the latest trends, he or she will make costly mistakes when dealing with real estate.
Learn About Specialties
Commercial real estate is not one large field where every business and building is the same. There are many specialties of commercial real estate, such as office, retail or industries, to choose from. Most clients look for professionals who have specialized knowledge in certain subfields.
Commercial real estate is never a simple or straightforward area of study. There are many different types of individuals involved from small business owners looking to rent buildings to companies looking to construct buildings on raw land. Understanding every aspect of commercial real estate is recommended to make the wisest decisions. There are plenty of tips, tricks and resources available to assist in the learning process.
Seasoned commercial real estate pros will tell you that achieving success in this dynamic field means keeping up with trends. Two other key factors often mentioned are learning to be opportunistic in spotting promising deals — and a proactive ability to spot potential losing situations.
Newbie commercial real estate entrepreneurs can obtain these traits through constant professional development. That means studying the field and tapping into resources that offer leading-edge information on what happening in real estate. The fresher the information the better.
Here, then, are some suburb commercial real estate informational and educational real estate resources that will keep you on top of what happening:
This multi-platform digital media provider is a producer of both news and a creator of live events. Owned by Wicks Group, a private equity firm, Bisnow covers 27 top metropolitan markets in the U.S. along with Canada and the U.K. The excellent “must-have” information of Bisnow has earned it a robust 600,000 subscribers. The latter is a strong indication of the quality and value of the information offered.
Founded in 2014, Connect Media has a news division that has grown rapidly since its start-up. It now produces 11 daily newsletters along with 10 commercial real estate newsletters that are handled by a crack team of professional editors.
Furthermore, Connect Media creates and promoted north of 200 digital events that draw many prominent names in the commercial real estate sector.
The Real Deal
Industry observers call it “the premier real estate news outlet in America.” The Real Deal has an enormous reach, capturing millions of professionals through print, digital and social media outlets. It offers breaking real estate news, market intelligence reports, proprietary rankings, custom research, trends, profiles and a lot more.
The Real Deal has been rated among the 300 most-visited sites in the United States – and is ranked No. 1 among websites that cater to wealthy followers.
This source is a leading platform that connects commercial real estate professionals with other key players. Those who frequent the site include building owners, building managers, commercial lenders, brokers and professional services firms.
Commercial Observer’s offers weekly coverage and real-time updates on its digital platform. It hosts live events and offers a cogent mix of breaking hard news along with in-depth feature stories. Here you will also find exclusive industry columnists and detailed analyses of market trends.
It’s common today to hear social observers discuss how the priorities of Millennials have shifted away from their elders, the Baby Boomer, and Gen X.
They say that most Millennials are not interested in buying homes and being saddled with a mortgage for 15 to 30 years. Rather, they are opting for a “lighter” lifestyle that allows them to be fluid, travel, and not be pinned down to the kinds of 9-to-5 jobs conducive to buying homes.
Well, take all those assumptions and toss them on the scrap heap of misguided punditry.
Statistics clearly show that Millennials are driving a surge in home buying. Amazingly, it’s those in their late 20s and 30s leading the way. While “experts” have given us the impression that Millennials have adopted a “gig economy” lifestyle that’s highly mobile, it seems more of them are opting to put down roots.
Stuart Eisenberg is the national director for construction and real estate BDO USA, a prominent accounting firm. He said Millennials have had some time now to pay off student loan debt and to get settled in their careers. He expects this youthful demographic to play “the disruptor role” in the real estate sector with an accelerated home-buying pace in the coming years.
Millennials are also shifting the way house buyers traditionally seek a permanent place to call home. They are far more likely to use mobile tech devices in their search for properties. This, in turn, will cause an adjustment in the way real estate agents choose to develop marketing strategies. The National Realtors Association reports that 99% of Millennials employ online searches for general information about the housing market. They also prefer text messaging as their preferred way to interact with real estate agents. Baby Boomers still prefer live phone conversations or face-to-face meetings.
Furthermore, Millennials are blowing right past smaller starter homes and opting for upscale models in suburbs and the rural edges of larger cities. The trend is to avoid costly inner-city properties. The COVID-19 factor is partly driving the latter phenomenon.
Ten years ago, few would have predicted the Millennials would be driving a trend toward increased demand for more expensive homes located in suburbs and rural areas.
For any Millenials considering or even beginning to scope the real estate world, you’re on the right track. Real estate investing is one of the smartest moves anyone could make, considering the versatility and potential returns. Investing in property comes with neat benefits like passive income, tax benefits, and full control over not only the property and your investment strategy but also your profits.
That being said, deciding to invest in property can be super daunting. Where do you start? What do you do with the property?
To nudge you in the right direction, here are some essential things that Millenial real estate investors should know before jumping in.
Know your budget and credit score
While it’s not necessary to be wealthy to invest in real estate, having some savings will help buffer any risks from investing or at least reduce the uncertainty.
Establish a financial goal and investment strategy
Know your goals and the best plan to get there. Generally, most investors don’t need to pay for an entire, say $250,000 property. This is for the Millenials who are still struggling to pay off school debt: don’t worry, you can invest as well. The cool thing about real estate investing is you can purchase most properties with a down payment, which tends to about 20% of the total price. Options like getting a bank loan or lending from a trusted partner are also helpful for millennial real estate investors with limited cash at their disposal.
Scope the market
Knowing where to look for viable property options requires looking at patterns like population growth, rental demand, and job availability.
Consider the type of property.
Here, you have a few choices at your disposal. The top types of real estate include single or multi-family properties, syndications, or buy & hold turnkey funds. Single or multi-family properties are in high demand and involves a short-term strategy. Syndications are larger, commercial properties with a group of investors, resulting in less risk. Turnkey real estate funds are longer-term investments that offer immediate passive income from tenants already living there.
When you know the type of property you’re looking for, it’s time to take a look at locations you’ve identified based on the real estate market. With your budget in mind, figure out if you want to flip a house or if you’d rather be a long-distance landlord for a turnkey property.
Above all, millennial real estate investors must continue learning and growing. While the first step is to try it out without hesitation, further education will make Millenials savvier in their real estate journey.