by Jim Pesavento, Director at NAIHBR
The American real estate market is facing major changes as it rolls into the second half of 2017. Consumers, their preferences, and the property inventory to satisfy market need are all changing faster than ever before, all culminating in a unique market opportunity not seen in over 20 years.
Millennials will make up 33% of homebuyers in 2017. This number is rising every day, and soon a majority of home sales will be to this new generation of buyers. This group of buyers is well educated, savvy, and resourceful. Their preferences in real estate generally lie in either new construction, or a property that has been recently renovated. Unfortunately, the condition of the majority of housing stock is not at this post-renovated level and therefore not an ideal option for these buyers.
Despite utilization of the internet for the purposes of home shopping and research, more buyers than ever before are using the services of a real estate professional (Marketwatch, March, 2017). Statistically, 85% of young boomers, 87% of generation X buyers and 89% of millennials used the services of a real estate agent in 2016. So, despite the technological advances, the trend is toward using Realtors more in the future, not less.
Builders broke ground on 784,000 single-family homes in 2016. Forecasts indicate an increase of 9-10 % in 2017, as well as 2018. A normal level of new home construction production would satisfy the market need, sustain population growth and replace older and obsolete homes. This number of needed new homes is estimated to be 1.3 million per year, and we are currently building at only 60% of that number. There is clearly a new housing shortage, and it is pacing to get worse long before it gets better. This is compounded by the fact that smaller builders cannot keep up with the demand, as speculative construction is capital intensive.
Much like these unique conditions create an unprecedented opportunity for the players in this space, NAIHBR offers the platform to bring the builders, agents and vendors together to create a synergistic relationship that can meet market demand and greatly benefit those that participate along the way. It is our pleasure to take this journey with you, and we welcome you to the NAIHBR family.
Meet the Author ...
Jim has spent over two decades in the real estate business as a builder, Realtor and as a mortgage broker. Jim brings a wealth of knowledge to NAIHBR. He lives in Illinois with his wife and 2 children.