6 housing trends that will shape the future.
As a homebuilder or developer, it is essential that you are aware of housing trends and market predictions for the future. Understanding the forces that will shape the housing market can help you develop a strategy to take advantage of these trends.
Experts are seeing key indicators begin to emerge, which may affect the homes – and living situations – of the future. Some trends are shaped by the buying habits of millennials, and now even Gen Z behind them. Other factors are driven by the economics and availability of the housing market.
1. A race to address the affordable housing shortage
It’s not easy to afford a house these days. For young adults or those who live in urban areas, it’s approaching a crisis. Due to a severe lack of mid-priced family homes, there is a growing percentage of the population that has almost been priced out of urban markets. This could have repercussions for years to come, as fewer and fewer people aspire to become homeowners.
“No segment of the housing market has so many potential buyers, yet a scalable solution remains so elusive, due to a number of economic factors,” according to a Curbed article that profiles a 2017 report from the Urban Land Institute.
2. Millennials are looking to the suburbs
Due to the lack of affordable housing in urban areas, many millennials are moving back to the suburbs, just like previous generations. According to a US News and World Report article, “The share of millennials…buying in an urban or central city area decreased from 21 percent to 17 percent from 2015 to 2016.”
Suburbs tend to give homeowners more home for their money. They also usually have larger lots, which is appealing for those who want to have a yard for kids to run around in.
3. Generation Z emerging as a new buying force.
Everyone loves to talk about millennials. However, many already have their eye on the generation behind them. Gen Z kids were born around 1996 – 2010, depending on where you look. They are a generation that has grown up with smartphones and tablets in their hands. They also don’t remember a time without social media. The oldest Gen Z members are either in college or will soon be heading there. In a few years, they will be moving into the workforce and start eyeing the housing market.
“Gen Z…is predicted to hit the post-college housing market in much the same way as millennials, loaded with debt and preferring a more urban lifestyle,” according to Curbed.
4. Baby boomers still hold sway in the housing market.
On the other end of the spectrum is the massive amount of retiring baby boomers. The economic and housing crises over the last decade hurt many in this generation financially, which has affected their savings and ability to afford housing in retirement. This will have a big impact, as developers seek solutions that fit the changed status of older adults. “By 2030, 75.5 million Americans will be over the age of 65, with a vast diversity of needs, financial situations, and lifestyle preferences,” according to Curbed.
5. A trend toward smaller living.
Not everyone believes bigger is better. Many people are choosing to downsize and simplify their lifestyles. Tiny homes, smaller apartments, and even mobile living have become more popular in recent years. There are even television shows devoted to people looking to buy tiny homes – which can range from about 100 – 500-square feet – can take the form of actual mini houses, yurts, and renovated campers. This downsized living spaces appeal to budget-conscious young adults and even retirees. Some options offer the ability to pick up and move.
Big cities will see a rise of tiny apartments and mobile living. This will help create more housing options in overpopulated areas.
6. Secondary markets outpacing primary cities in growth
The Urban Land Institute found that secondary markets are growing faster than so-called primary cities such as LA, New York, Boston and San Francisco. This is due to a number of factors, but the trend should continue.
US Markets to Watch in 2018:
- Seattle
- Austin
- Salt Lake City
- Raleigh/Durham
- Dallas/Fort Worth
- Fort Lauderdale
- Los Angeles
- San Jose
- Nashville
- Boston
- Miami
These 6 housing trends will be affecting developers and construction companies for years to come. Knowing about these trends in will help you plan and make the wisest investments for your business, so you can capitalize on the future needs of homebuyers.
No Boundaries Advisors has been helping businesses like yours grow and thrive for over 25 years. For expert advice and accounting expertise, contact us to schedule a consultation.
