Top 10 Housing trend predictions for 2013
1) Compact Design with Shared Common Areas
We expect there to be an increase in compact design and shared common areas. Not only are baby boomers needing to adjust to smaller spaces closer to their needs and desired amenities, the Gen X and Y’ers have been raised with smart growth as a responsibility and see financial risks with investing in homes after they saw the housing market crash. Also, a small living space with a roof deck or garden area with impromptu meet up’s via social media or text provide a social outlet and common area. In Atlanta, the new Sovereign has The Sky Terrace on the roof deck with saline infused pool, Jacuzzi, 2 outdoor gas grills and fireplace, soothing music, and superb views of the skyline. These two levels also feature 3 great club rooms/lounges, and a unique wine tasting room with private vintage cabinets. In Maimi’s new highrise 900 Biscayne Bay, residents have the ability to work from home and meet clients in a private Business Center complete with executive meeting offices.
2) Multifamily Housing Who needs a three bedroom single family house? Not Gen Y’ers. and soon not baby boomers Many of the young millennials who are ready to buy a home in the near future are getting married and having children later in life which places their need for a larger family home on pause temporarily. For them, the compact design is a perfect match to save and enjoy recreation outside the home. There are other reasons we predict multifamily housing to continue as a trend in 2013. Older couples with their children who have moved out, no longer need the space of a large home, and they could find multifamily housing an attractive option. Gen Y is a generation of being on the move as a result of the economy downturn after finishing their education. Many Gen Y’ers have been forced to “move where the jobs are”. Because of the compact nature of multifamily housing, one can pack up and move to a better opportunity. According to Apartments.com “employment opportunity” was the #1 reason people moved in 2012. This economic migratory of Gen Y’ers might decrease as the economy comes back into full swing. As many people are saving up for a single family home by starting with a multifamily unit first.
3) Housing Inventory will Remain Low With the competition for houses high, the inventory will continue to remain low in of 2013. Based on October's selling pace, the nation's supply of new homes for sale was 4.8 months, down from 12 months three years ago. Existing homes for sale were at a 5.4-month supply in October, down 22% from a year ago, says the National Association of Realtors.
Curbed took a different look at the low inventory explaining there are two things to look at, “The first thing to look at is this shadow inventory that has yet to it hit, if its ever going to. Second, there are a healthy amount of sellers who can't sell because they're under water with how much they owe on their home.” With all these factors in mind it will be interesting to see when in 2013 the inventory will hit its lowest point.
4) Technology will change the market
Two areas where technology is changing the housing industry:
How does technology fit into the real estate industry? Does the home or building include wifi? What other smart systems (heating, keyless entries) come with the unit? How does the HOA or Property Manager communicate with the residents? Are all forms accessible via the internet? Is there an online forum or website to communicate on?
Does the community have a Facebook Page? Do you know your building rating on Yelp? Who is the Mayor on Foursquare? Does the Real Estate Agent have lots of positive recommendations on LinkedIn? Can they view properties on a mobile platform? What are residents saying about the neighborhood online? Did someone “pin” the house as a dream home?
These questions are just the beginning with technology evolving faster than we imagined. Specifically the amount of information for consumers to access on the internet is startling. Smart cities already have someone to manage their online reputation on the internet and in Social Media.
5) Lenders will continue to be tight with giving loans Although there is finally some good news in real estate and the economy, lenders will continue to be extra cautious in financing homebuyers. The QM (Qualified Mortgage) Rules are anticipated to be released in the next month or two, however according to QualifiedMortgage.org, “Most of the discussion at this point seems to revolve around the protections given to mortgage lenders. Under the QM rule, lenders will be offered some degree of legal protection from consumer lawsuits, if they adhere to the QM guidelines when making loans.”
6) High demand for walkable neighborhoods Gas prices have risen over $2 a gallon since 2000. When Americans are spending over $2,000 average just on gas a year, many are seeing to live in communities where they are close to work and can access leisure activities by walking. Top 10 Walkability Scores
Jersey City, NJ
San Francisco, CA
Explore your cities walkability score by going to www.Walkscore.com
7) New Home Construction could double in 2013 We predict that new housing construction will double in 2013 to meet the demand of need for additional housing as reservoirs of current homes are sold. Despite the decline of new housing built between 2008-2012, the population has continued to grow in the United States. Many construction companies will aim to beat competitors to the finish line in completing new projects. According to the National Association of Home Builders, multifamily housing accounted for 65% of the new permits in 2012. We expect many of these projects to be in alignment with public planning that came during the beginning of the millennium with housing projects which address a specific population: ie, senior, low income and are built sustainable to be favored over those which do not.
8) Decrease in Forclosed Homes on the Market By the end of 2012 we saw Although there still is a large number of homes owned by the bank, they are strategically releasing them back into the market at a healthy pace, and the amount of inventory of foreclosed homes will continue to decrease over 2013. For those interested in a short sale, they should probably get on the bandwagon before their options become decreased.
9) Housing Prices will continue to Rise Home prices have continued to increase during 2012. We expect these trends to continue and see a slow and steady rising. Standard & Poor's/Case-Shiller 20-city index showed that prices rose by 4.3% from a year ago in October. Since January, prices are up 6.9% so far this year, the largest year-to-date gain since 2005.
10) Increase in Green Building Following a trend nationwide, we predict D.C. to continue to build homes which follow the latest green standards and renovate current buildings to become more energy efficient. According to Pike Research, solar cells integrated into rooftops, windows and other building facades is poised to quadruple in value in the next five years. Innovative practices of design in the past have now become expectations for home buyers. As Gen X and Gen Y’ers enter the market, they are making careful choices of low waste and energy efficiency. In PWC and Urban Lands Institute’s Emerging Trends in Real Estate 2013they state, “Major tenants willingly pay high rents in return for more efficient design layouts and lower operating costs in LEED rated, green projects. These new buildings can lure tenants out of last-generation “brown” product. We expect more buildings to be reused, infill into existing neighborhoods and integration of planning of new designs with current and future transportation and community shopping and recreation. Also to keep on the look for are Net Zero Communities where the goal is to use as much energy as they create.