On the 12th day of Christmas, my true love gave to me… 12 real estate trends for the upcoming year.
Yes, it’s time for a forecast. Get the popcorn and brace yourself because RealEstateAgent.com is making some predictions as to what 2019 will bring to real estate. This one is for everybody; whether you are a home buyer, a home seller – or neither; just a homeowner – or a real estate agent, you will find interesting information to guide your expectations for the upcoming year.
How did we reach these real estate trends?
Through the constant research our team has to do in order to write the hundreds of articles we write every year, keeping our eyes and ears open to what’s happening and what some of our real estate agents tell us every day, aligned with our decade old experience in this business, we’ve singled out some of the things we see as a strong possibility in the near future.
To figure out trends for real estate palettes, you usually have to keep an eye on both Pantone’s and Sherwin-Williams colors for the year. Pantone will act as the more erudite side of the spectrum and Sherwin-Williams as the more practical down-to-earth side of the spectrum. It’s somewhere in the middle of the two – aligned with what people are indeed buying – where you will find the answers.
With that in mind, it’s flagrant the way the color palette has been shifting to brighter tones since 2017. 2019 promises to go even bolder color wise. Pantone’s color palette for the year is nothing but strong colors, some almost fluorescent! Even the neutral tones are far from “dark”. But, however less “out there”, Sherwin-Williams’ colors are also very…well, colorful. Black is totally gone. So is white. Say hello to yellows, greens and reds.
Expect to see colorful lacquered furniture, colorful walls – accent walls or not – and the use of colorful patterns to go along with the colorful walls. “The year of the kitsch”, some are calling.
In 2019, we believe the use of artificial intelligence (AI) – something that is already a reality, especially in Silicon Valley vicinities – will become accessible and noted by home buyers throughout the nation.
What? Are you surprised real estate agents have already started using AI to help them sell a house? Yes, the future is here already; it’s just not as exciting as we thought it would be. The use of artificial intelligence has been modest so far: mainly for client interface, giving information about the house – square footage, asking price, days on the market, contact information etc. – at open houses and such, saving the real estate agent from repeating the same thing all day long, letting him focus on other pressing issues. Although boring, it’s been very helpful and profitable, and most importantly, in a non-threatening way. Most humans cringe as soon as they hear the words “artificial intelligence” because they feel it will replace us. As far as this use goes, it’s not only harmless but of great help. Moving on, it’s expected the real estate industry will develop AI that’s more active than reactive and then we will see some people fighting back. Our position is that whatever development that removes real estate agents from collecting to analyzing data is a good and necessary development both for real estate agents and home buyers and sellers.
Smart For Sale Signs
More than QR codes for real estate signs, we’re calling the popularization of smart for sale signs that will come with motion sensor and – why not? – will have AI built-in so that passerby home buyers can have their questions answered right then and there. The nuisance of it – What? Lights turning on because of animals and not people – is too small compared to the benefits of it. Connecting them with smart home devices and other apps will make those smart for sale signs save so much time from real estate agents… it’s not even funny. Not to mention that, when the home is vacant for sale, there is always the chance of mean-spirited people breaking in, and these signs almost work as a home security system, if you think about it. This is one we are very excited to see it happen.
Yup. Some high-end real estate firms have already started testing with high-fidelity virtual reality models of properties they are selling so that its clients can “visit” them without having to leave their room. In fact, there are companies that already do their everyday work *in* a virtual reality company. Each worker has its own avatar and they meet up at the company’s headquarter, a huge crazy 3D modeled building with a lake where workers can take a break water-skiing –we’re not kidding! – all of that while wearing pajamas, sitting at their home office in real life.
We know it’s a bit out there, but with the advance of VR goggles and other machinery, it’s something that will increasingly happen because the price of real estate is so high due to the lack of land to build. At first, because the VR operation is still not cheap and it takes time, the real estate area where consumers are more likely to see – or live – it will be in the event of an Apartment Complex, where the company behind it will build a showroom model of what it feels like to be in that building so that they don’t spend time and money with visits and they can do that while the apartment complex is not even built yet. It’s kind of genius.
One last technology trend. The use of driverless cars is expected to make a big impact in real estate in 2019. Driverless cars have been tested for quite some time now. We have mentioned in our Self-driving cars, cryptocurrencies, and Blockchain article that Uber has even been working with self-driving trucks to move freight around Arizona. So, why now? What has changed?
That’s because General Motors has announced its first driverless car will hit the market in California and Arizona for 2019. It won’t even come with a steering wheel and pedals! And that’s going to be a game changer because once consumers get to buy and use driverless cars, it will completely alter the dynamics of real estate. Albeit it will take long to become a national thing, it’s still going to be interesting to see big metropolitan areas like New York and California deal with that disruption. How long until a lot of parking facilities decide to sell their real estate because profit won’t be the same with cars being able to return home while workers work? And what about the opportunities that real estate companies will have to pick clients up and bring them to showings and open houses, almost like a concierge service. Keep an eye on it for a lot of controversy, regulations backlash and much more.
Ok, this one is also about technology but the reason why it will be a trend was determined by one thing that intertwines the next 3 real estate trends for 2019: the real estate industry is expecting 2019 to be a slower year for real estate.
Calm down, we’re not burying the leed here. The thing is several experts, including the California Board of Realtors, have mentioned the demand is likely to cool down next year in comparison with the rising supply. Together with the low wages, the problems coming from the US Tax on Imports – the “Tariff Wars” – taking its toll on workers, Americans are now paying a third or more of their paycheck in rent or mortgages.
But it’s not expected to be like 2008 having a big crisis arrive because good regulations were put in place then, subprime mortgages won’t be a problem this time. What will happen is that the market will adjust a bit. So, while the luxury real estate market will hardly take a hit from it – because the stock market (basically “owned” by the rich 1%) is going strong – it will be middle class America that will slow down for a while until the environment changes and, hopefully, benefits it again; after all it accounts for a little bit more than 50% of the American population.
But anyway, back to the economic slowdown for middle class… when it comes to real estate it will mean a bunch of things. One of them is the interest in 3D-Printed Homes. Because of the slow-down, it’s likely to happen and cause a push for faster approval of 3D Printing regulations when it comes to construction. Especially to attend to a serious problem that some say is already happening but if the worst predictions are confirmed might become a very serious problem: homelessness. Which brings us to our next point…
We believe homeless housing initiatives will take off to the public eye like never before. It’s a trend already in big cities. It’s been one of Amazon’s biggest preoccupations in regards to its expansion plans (Amazon HQ2) to New York and Virginia because of its experience in Seattle, where – together with companies like Microsoft and Starbucks – it ended up producing such a hard and fast gentrification with such absurd housing costs, that led too many people to homelessness. Add the opioid crisis with the increasing gap between the rich and the poor, and the homelessness issue becomes an urgent one.
Expect to see even more NGOs and business counterparts to try and attenuate the problem. And, hopefully, some more incisive and empathetic action from the Department of Housing and Urban Development.
Decrease of the importance of square footage
Poor Millennials. They have less available space to build and less money to spend then all generations before. And for the time being it’s not getting any better. So what are they going to do? Cry? No, they started to shape reality in a way that it works for them. And that means “the hell with the square footage; we want services”. With all we mentioned about the economy, it makes perfect sense that the place where both the real estate industry and the consumers will be able to meet is this place where the square footage is nothing fancy and the amenities are the big stars.
Being close, having accessible public transportation, health-oriented spaces and “smart” and “green” ways of living will become even more of a selling point than square footage.
If square footage is losing its force, that means that the fascinating trend of Tiny Homes is likely to keep going. Luxury for Millennial middle class will be a well-thought-out accessible small space. It might make Tiny Homes jump ahead of Mobile Homes and DIY homes on the non-traditional homes battle.
The biggest impediment to it is legislation. Politicians from states that don’t allow tiny houses will have to push for legislature concerning this subject if they are willing to help its constituents with the economic slow down coming. To keep an eye on!
Virginia on Fire
From all the closest states to Washington DC, Virginia has always been one of the most overlooked; always viewed as a very important political state, with eight presidents of the United States born there and several government buildings and organizations – like the Pentagon – located there. But now that the Amazon HQ2 decision announcement has been made we believe Virginia will shine brightly under the public eye for more than just the proximity to power. Well, considering the capitalist world we live, it’s fair to say that the “proximity” will become obsolete; Virginia will become power itself!
If the billions of dollars and 25,000 jobs Amazon HQ2 is bringing with it weren’t enough, expect other companies to piggyback Amazon and invest in Virginia too! Arlington Real Estate Agents have a lot of work ahead of themselves.
New York Problems
New York was the other city chosen to receive Amazon HQ2. But the optimism is not the same as for Virginia. The thing is: how much can a city take? Even when it comes to good things, like it’s the case. The Big Apple has nowhere to grow anymore and prices are some of the highest in the country – as is the salary; one would counter. Will Amazons HQ2 weight be too much and disrupt the chaotic peace and responsible growth of the city or will it tear the whole thing with an insufferable gentrification and homelessness crisis and change of identity?
Anyways, New York is in for a treat with a lot of possible problems that, if dealt with in a responsible manner will turn the city into an even more incredibly special city. If there’s someone who can pull that out it’s the Big Apple. We’ll be watching you NYC!
And the last one, sort of staying in the subject…
New Amazon HQ2
We believe one or two other companies might try to do the same as Amazon and try a backward bidding kind of expansion plan. It won’t be as huge but it’s definitely going to be interesting to see and take the temperature of it. If Amazon HQ2 is a success, New York has no problems and Virginia soars, maybe other cities will become excited over a new process like this. But if it’s something different than an outstanding success, we believe most will give a polite no to the companies. The frenzy of Amazon HQ2 will not happen again.
We hope you’ve enjoyed this article. The comment box is open for you to sound your predictions – and complain, if you feel like so, about any of ours. But one prediction we hope comes true is this one: that you have a very successful year! Happy 2019!