Where do national experts say real estate is heading? Let's find out.
I recently returned from the HousingWire Housing Conference at the George W. Bush Presidential Library & Museum in Dallas (a stunning venue!). This event is what I consider the country's premier gathering for real estate information. It is the second year of this event and marked my second year attending.
Top experts in the lending and real estate arenas shared economic updates and national lending / real estate trends, with one common theme: We're experiencing a significant market recalibration.
Several key trends are shaping our future housing landscape, including:
- We're seeing a shift toward smaller, more efficient homes reminiscent of post-WWII housing for starter new builds (around 1,600 square feet, 3 bedrooms/2 baths, lower ceilings, smaller lots).
- Manufactured housing is gaining newfound respect as a viable solution to help with affordability.
- Multi-generational living is making a comeback. A BIG comeback.
- Creative financing that may allow people to use their 401K’s for a down payment to purchase a home with no tax ramification, increasing the capital gains amount on a home sale…These are just two of many mentioned strategies being proposed.
One fascinating dynamic is the role of our largest real estate ownership demographic group - those aged 60-78. This generation isn't moving much, and we're seeing more homes gifted directly to children rather than entering the market. The Great Wealth Transfer (estimated to be 85 to 125 trillion dollars) combined with the fact that baby boomers own many of the most desirable properties, with features that are too costly to be replicated today - creates an interesting market dynamic. Everyone wants those homes but not enough are selling. This is a HUGE factor in the persistent inventory crunch.
What about affordability? We're seeing multiple channels:
- Pricing has softened
- Incomes have risen
- Interest rates have decreased
- The potential legislation mentioned to increase the tax exemption on home sales from $250,000 to $1 million per person, would really help to unlock inventory some of that inventory
While millennials face unique challenges in entering the market, Gen Z is showing surprising strength, despite being half the demographic size. We're also seeing the return of traditional market practices, with contingencies becoming very common in offers.
Current market conditions show inventory down 30% locally due to weather (inventory is down across the country due to crazy winter weather everywhere) with properties selling in 70 days or less considered fast-paced. Our current days on market average is 69 so we are still in the fast paced market category. Nationwide is at 90 days right now.
Immediate key takeaway: Home inspections are now the primary reason deals fall through, so we EXTRA recommend getting one done before listing. We have always been an advocate of this. Worth its weight in gold.
And how about that economy?
The economic outlook is encouraging. All speakers expressed optimism for 2026-2028, noting that increasing economic stability is bringing more people into the market.
While prices aren't declining, they're maintaining steady 1-5% growth (typical for our market). However, insurance costs have become a significant factor, now accounting for 9% of monthly housing expenses. Taxes are too now a major factor with total monthly housing budgets. In some cases, insurance and taxes are as much as a mortgage payment.
Finally, AI is poised to revolutionize just about everything, real estate included. We'll see this particularly in lending and market analysis - though its impact will be primarily behind the scenes, making processes more efficient and quicker.
The word of the year is "recalibration"! While costs won't return to pre-pandemic levels, the market is finding its new normal, and buyers and sellers are adjusting their expectations accordingly.
When you need someone to guide you through the local real estate market with practicality and level-headedness, you know who to call. We're honored to continue to increase our knowledge on your behalf. I absolutely love investing in learning with the best in my industry to continue to help you at the highest level possible.
