Real Estate Trends For 2018

It’s the dawn of a new year. 2018 is officially here, and we have a bright future to look forward to. Multiple industries have much to look forward to this year, and real estate is no exception. There’s plenty to celebrate and get excited about. With that being said, I wanted to highlight some of the most fascinating and impactful trends that real estate will likely experience this year.
The Millennial Mindset
Real estate agents are quickly learning that they must learn to work with a newer mindset: The Millennial Mindset. Millennials (those born anywhere from early 80s to late 90s) look at housing in a very different way than previous generations. Millennials are, for one, in debt. Several Millennials have a college degree, which is fantastic, however, that does mean that a great deal of Millennials are now in debt due to their student loans. They are incredibly price conscious. Millennials are also very open to communal/co-living situations. They understand that having more people in a home means less pressure on rent price. Millennials are also constantly invested in their digital devices. Real estate professionals are now learning that, in order to reach this new demographic, they must begin to utilize the tools that Millennials use. This means social media, emails, Internet, simplified websites and mobile apps.
Millennials are also very accustomed to living in a world where almost everything is available at the tap of a button. We can now hail a ride, order food, purchase clothing and goods and even handle our bank accounts from our mobile devices and computers in a few easy steps. Millennials see no reason why they shouldn’t be able to do the same with real estate. Having dedicated websites or mobile apps that allow potential home buyers to sell or buy a property is almost a must in today’s age; and if it isn’t yet, it’s getting there.
Short-Term Rentals
This is a growing trend with both Millennials as well as older generations. Short-term rental services, such as Airbnb or FlipKey allow users, and everyday, average citizens, become landlords. You can use your home as a hotel or bed and breakfast and profit! These stays tend to be very short, hence the term, “short-term rental.” As people look for cheaper ways to pay for housing, short-term rentals are the most lucrative market. If you haven’t looked into short-term rentals yet, make sure to do so. The industry has been growing for the last few years and shows no signs of slowing.

Are Millennials Buying Real Estate?

According to Spencer Rascoff, the CEO of Zillow Group, millennials buy real estate far more than people think that they do. In fact, millennials spent $500 billion in real estate in the last 12 months. However, millennials do approach buying real estate in different ways than previous generations.
Millennials often go straight to the Internet for information, and real estate information is no exception. More than any other generation, and more than ever before, millennials are finding both properties and agents online. The internet has made the process of buying a home or investing in real estate easier and more accessible than ever. Instead of investing loads of time in calling agency after agency and inspecting property after property, millennials do much of the home buying process from their computer or smartphone.
Millennials, more than any other generation, are borrowing money to spend on real estate. They often borrow money for down payments from friends and families. While this may not always be a reliable solution, it is oftentimes necessary in order for millennials to get their foot in the door. This is because millennials often have a hard time finding homes that they can afford on their own. This is the result of a variety of factors. Many millennials face student debt higher than in previous generations and find themselves working low paying jobs. Oftentimes, these jobs are not even in the fields that they dedicated time studying to work in. However, by borrowing money from those around them, they have a springboard from which they can jump into the housing market.
Millennials now make up a large part of the real estate market. Although they often face financial hardships greater than those of previous generations as a result of inflation and wage stagnation, they end up having similar views towards home ownership to those of the generations that came before them. While renting is a very popular method that opens up a gateway to home ownership for them, millennials also often take out loans to pay for their properties. While this can backfire (and often results in a lot of debt), the end result is more millennials buying up real estate.
Millennials may not always be putting themselves in positive situations by buying homes, but they often do anyway and now make up a large section of the real estate market.

Airbnb is Getting Into the Real Estate Industry

I recently wrote a blog that discussed the effect of Airbnb, the popular sharing economy service, on real estate. In that blog, I mentioned that Airbnb could prove to be a real threat to the real estate industry. The service is already disrupting the hospitality industry and has caused a bit of a stir in real estate, but its latest venture could drastically impact both industries.

 

According to a report from Fastcodesign.com, Airbnb is partnering up with a South Florida-based development company, Newgard Development Group, in order to construct an apartment building specifically designed for the sharing economy. Depending on the success of the building, Airbnb could roll out several more buildings throughout the country.

 

Dubbed “Niido,” the apartment building will exclusively host Airbnb rentals and feature 324 units. Niido is being constructed in Kissimmee, Florida.

 

Airbnb has been looking into making deals with apartment complexes for sometime, but has been limited by legal restrictions. By partnering with a development firm to build its own apartment buildings, the company can completely avoid those issues.

 

The Niido building is being specifically designed to accommodate the average sharing economy user. Niido will feature wide open common areas in the hopes that visiting travelers will interact and engage with each other; units will feature home offices that can easily transform into a spare bedroom; each unit will feature bathrooms and kitchens constructed of durable material that is also easy to clean; units will include small safes for travelers to store their personal belongings; each unit will work on a keyless entry system that only grants access during the duration of a visitor’s stay and tenants will be able to access both home-sharing and maintenance services through a single app. Newgard Development and Airbnb have truly pulled out all of the stops in order to provide a unique experience that will hopefully push the sharing economy industry forward.

 

With the Niido building, Airbnb hopes to create something of a small community. A portion of all standard Airbnb booking fees will go towards community projects, such as cooking and art classes. This will help to create a sense of community and offer a great experience and a better reason to stay in a Niido building.

 

Should Airbnb’s Niido building take off, the company could drastically encroach on the real estate industry. What are your thoughts? Do you want to see Airbnb make their own apartment complexes or would you rather they stick with what’s been working?

Where Will Amazon Build its New Headquarters?

Unless you’ve been living under a rock, you are familiar with Amazon. What once started out as a small, online book store has grown into the world’s largest online retailer and one of the world’s largest retailers, period. Currently, the company is headquartered in Seattle, Washington. However, the company is continuing its growth, and it is looking to build a secondary headquarters. And several cities across the nation are vying for the opportunity to become the newest headquarters for one of the world’s largest companies. Now, the question remains: where will Amazon call its second home?

 

Since Amazon announced its nationwide location hunt, multiple cities around the country have all flocked at Amazon’s door to bring the company, and the prospective 50,000 jobs that it entails, to their town. And Amazon has not been shy about what it wants from its new hometown. In an official statement from Amazon, the company announced that it will accept applications from cities while looking at six core factors: tech labor force, fiscal health, cost of living, college population, culture fit, and state tax rank.

 

At the moment, there seem to be a few cities that are prime contenders. These cities are: Dallas, Boston, Washington D.C., Atlanta, Chicago, Denver, New York, Nashville, Austin, Minneapolis, and even Newark. Surprisingly, another major contender on the list appears to be Seattle, Washington.

 

The e-commerce company has received at least 238 applications, many of which are from major metropolitan areas. Others are from much smaller areas, like Rockdale, Texas, whose population maxes out at 5,628.

 

Whichever city is chosen to house Amazon’s newest headquarters will likely be looking at some great benefits. Firstly, the building will cost several billion dollars to actually build, and, as previously mentioned, the new headquarters will create around 50,000 jobs, which is certain to stimulate the local economy. The lucky city will also become something of a tech haven overnight.

 

I am not only interested in seeing where Amazon decides to set up shop, but also how this decision ultimately affects the surrounding area. When a major corporation like Amazon builds a new campus, things are bound to change drastically; and not always for the better.

 

What are your thoughts? Where do you want to see Amazon build their second headquarters?

How to Find the Right Real Estate Agent

Looking for a home is a major decision in a person’s life. You want to ensure that you are finding the perfect home to start your independent life, raise a family or whatever purpose you might have. The house hunting process is typically very trying and never goes as smoothly as we’d hope. Luckily, there are professionals that try their hardest to make the process as manageable as possible. But not all real estate agents are created equal. Here’s a quick guide to help you find the right real estate agent.

 

Find a Licensed and Professional Agent

This might seem like a no brainer, but you wouldn’t believe the number of people who hire a close friend or part-time agent only to have the situation blow up in their face. When looking for an agent, ensure that they are fully licensed by their respective. Also, try your best to get an agent who’s had experience in tough deals. You want to make sure that your agent will be on your side and negotiate as hard as possible in your best interests.

 

Communication

Another fantastic trait of a great real estate agent is great communication. You want an agent who is going to be constantly communicating with you, either through text message, email or phone call. Obviously, they shouldn’t be overbearing, but if something of note happens, you should be the first to know as quickly as possible. They should also be very good at communicating the pros and cons of your house or property to potential buyers. If they cannot communicate effectively to buyers, there is no hope for a sale.

 

Organization

You want an agent who is organized. Point blank. If they seem to be disheveled and all over the place, you might want to consider a new agent. If your agent is punctual, keeps notes, records and all necessary information in an easy to access and read manner, then you’ve got a winner.

 

There are several other factors that go into making a great real estate agent. These are only a few of the important characteristics. When looking for an agent, talk to them and get to know them. You’ll probably have a good idea of who they are and how effective they will be after a few minutes of discussion.

 

Good luck!

Disruptor: Bitcoin in Real Estate

Technology is an absolutely invaluable part of our society. Objectively, the Internet is no longer an option, it is a necessity; we are constantly performing a variety of tasks on our smartphones, which are really supercomputers condensed into a device that’s barely larger than a deck of cards; and we are moving closer and closer to self-driving cars that no longer run on gasoline. The world around us is evolving into a digital utopia, and it’s taking no prisoners. Almost every industry, field or sector has been heavily influenced by some form of technology. One of the more recent impacts technology has made on our society is in our money. And this new form of money is impacting another important aspect of life: real estate.

 

Before I go any further, let me explain what exactly Bitcoin is. Originally introduced in 2009, Bitcoin is a digital form of currency known as cryptocurrency. The system works on a model known as peer-to-peer, meaning users exchange monies with one another directly without the use of a “middleman.” In the simplest description possible, Bitcoin is an online-exclusive method of virtual payment. And even though it has been around for roughly 10 years, it is just beginning to catch on in the mainstream market now.

 

Bitcoin seems to be most prevalent in the retail and restaurant industries. It is quickly becoming a viable option for payment. And now it looks to take on the real estate industry.

 

A report from CNBC.com states that there have already been properties purchased through Bitcoin in New York, Texas and California. President of Magnum Real Estate Group, Ben Shaoul, who was featured in the article, claims that he has begun to see Bitcoin make an impact in the Texas real estate market. He believes that the younger demographic of America is looking for alternative methods to purchase homes and property; they no longer want to rely on traditional U.S. currency. Bitcoin offers that freedom and variety in spades.

 

If Bitcoin continues to become widely accepted, it could take over the world and become just as easa to use as a credit card or a check. I am very interested to see if this new trend will take over or fizzle out.

How AirBnB is Affecting Real Estate

We all love the wonders that technology has bestowed upon us. Truly, it has changed our lives in some fascinating ways. We have instant access to virtually all of the world’s knowledge, we can communicate with almost anyone in the world, instantaneously, and we are making significant advancements in a variety of industries, like healthcare and finance. That being said, although technology has been a major boon for us as a society, it has also been a bit of a nuisance to others. Technology has a knack for “disrupting” longstanding traditions and industries. And almost every industry has been disrupted in some form or another. For those unaware of the term disruption in this context, it can be quickly summed up like this: disruption occurs when a new technology or method of completing a task, objective or service displaces longstanding traditions and methods.

 

And while disruption tends to move our society forward in a positive direction, it can pose challenges to our pre-existing industries. A great example of this can be seen in the sharing economy. Services like Uber and Lyft, where ordinary citizens can become overnight chauffeurs, are giving the taxi industry a run for its money. But I want to focus on another sharing economy service: AirBnB.

 

AirBnB takes the concept of Uber and Lyft and applies it to the hospitality industry. Homeowners and landlords can post a room or building on the service and host visitors, travelers or anyone else. You simply sign up with AirBnB and, essentially, turn your house into a hotel. And while this may sound like a novel idea, it poses a potential threat to the real estate industry.

 

According to recent reports, the wildly popular sharing economy company is looking into getting into long-term real estate. Currently, AirBnB focuses primarily on short-term leases. Most AirBnB hosts rent rooms out for a few days, but now, because of the company’s growth, they may be expanding into more lengthy leases.

 

Industry professionals are unphased, claiming that AirBnB could not make the necessary impact on the industry to make any real impact. However, with the company’s massive growth and popularity, they could certainly hurt other real estate developers and investors. Many of the hosts that use AirBnB purchase multiple properties for the sole purpose of using AirBnB.

 

These are still just rumors, but if they come to fruition, then multiple real estate developers and investors could wind up competing with one of the largest growing hospitality services in the country.

6 Steps To Becoming A Real Estate Developer

Real estate development can be described as the act of buying real estate, making improvements and then selling the real estate. The improvements usually involve making the buildings better or creating new buildings on the land. Real estate can be very lucrative, but only if you can predict market trends and recognize opportunities. If you cannot do this, you could suffer some heavy losses. Here are a few steps to become a good real estate developer:

Get an degree.
There is not one particular degree that lends itself to real estate development. It is however, important that you study something that is relevant to this line of business. If you want to go into real estate development, it’s a good idea to earn a degree in construction management, business administration, urban development or finance. You’ll also need to take the necessary classes and assessments to receive a real estate license in your particular state.

Work for someone in the real estate business.
Seek out a job that allows you to be involved in the buying, selling or development of real estate. While you’re working in this position, try to absorb as much information as you can about the industry. In the meantime, make sure you’re building up your credit score and your personal savings in order to help you finance your future real estate development business.

Establish your business’ legal identity.
The real estate business can lead to high financial risks. For this reason, you should form a business entity that provides you with liability protection, like a corporation or a limited liability company. When you form an entity like this, you will likely encounter more accounting issues and higher fees than you would come across if you had a sole proprietorship or a simple partnership. However, these issues are nowhere near as major as the personal costs you would face if there was a sudden downturn in the real estate market.

Work alongside professional contractors and construction firms.
Once you’ve set up your company you’ll need to construct new buildings or improve your properties. In order to do this, you’ll need to work with construction firms or professional contractors. Once you build relationships with construction professionals, you will have people to rely on for timely and quality work in the future.

Build relationships with lenders.
The best way to finance your investment activities is to connect with local and independent lenders. When theses lenders begin to trust you, they will give you quick personalized services for competitive rates.

Research market trends.
If you want to be a successful real estate developer, you need to be able to project rises and falls in real estate prices. Sell when prices are high and buy when prices are low. Make sure you get up-to-date information about real estate prices using specialized Internet tools.

Being a real estate developer can be an extremely rewarding and lucrative business if you are able to predict market trends. Follow these steps and you’re bound to achieve a lot of success in the field of real estate development.

Urban Land Institute Announces Real Estate Development Finalists

architecture

The Urban Land Institute’s Global Awards for Excellence recognizes and rewards excellence in project development. Since 1997, this prestigious awards program has been honoring projects developed in private, public, and nonprofit sectors. The Urban Land Institute (ULI) allows nomination to be open to all and a jury, which is not limited to ULI members, choose the finalist and winners of the competition. The jury consists of members from various professions including but not limited to real estate development, land development, public affairs, and designs.

This year‘s finalist consist of real estate projects that have the best use of Twenty-six developments from around the globe have been selected as finalists in the Urban Land Institute’s (ULI) 2016 Global Awards for Excellence competition.

The finalist for 2016 include:

The Hall

  • San Francisco, California, United States
  • Developers: War Horse and Tidewater Capital

Chophouse Row

  • Seattle, Washington, United States
  • Developer: Dunn & Hobbes LLC
  • Designer: SKL Architects, Graham Baba Architects, et al.

Antara

  • Mexico City, Estado de México, Mexico
  • Developer: GSM
  • Designer: Sordo Madaleno Arquitectos et al.

Daniels Spectrum

  • Toronto, Ontario, Canada
  • Developer: Regent Park Arts Non-Profit Development Corporation (RPAD)
  • Designer: Diamond Schmitt Architects Inc.

Heart of Lake

  • Xiamen, Fujian Province, China
  • Developer: Vanke Real Estate Enterprise;
  • Designer: Robert A.M. Stern Architects, BIAD, and Olin

BBVA Bancomer Operations Center

  • Mexico City, Estado de México, Mexico
  • Developer: BBVA Bancomer
  • Designer: Skidmore, Owings & Merrill LLP (SOM)

Celadon at 9th & Broadway

  • San Diego, California, United States
  • Developer: BRIDGE Housing Corporation
  • Designer: SVA Architects and Studio E Architects

The Boucicaut Eco-Neighborhood

  • Paris, Ile-de-France, France
  • Developer: Sempariseine;
  • Designer: AUA Paul Chemetov, Jean-Francois Schmit Architectes, et al.

The Edge

  • Amsterdam, North-Holland, Netherlands
  • Developer: OVG Real Estate
  • Designer: PLP Architecture et al.

35XV

  • New York, New York, United States
  • Developer: AGA 15th Street LLC
  • Designer: FXFOWLE

345meatpacking

  • New York, New York, United States
  • Developer/Designer: DDG

For a complete list of finalist for the 2016 The Urban Land Institute’s Global Awards for Excellence, please visit Uli.org

 

A Guide To Smart Home Buying: Part 1

home buying

Buying a home can feel overwhelming. You know you want to purchase a home but there are so many steps to the process that you may not know where to start. How will you decide on a good budget? How will you find the right realtor? And most importantly, how will you find the perfect home for you? Buying a home takes a lot of preparation and careful thought. Here is a step-by-step guide to buying a home:

1)Look into your credit
There are three major credit agencies: Equifax, Experian, and TransUnion. These agencies keep credit reports, which indicate whether you have ever run into any serious issues with credit and whether you tend to be late with payments. Credit scores are calculated from a formula based on the information found in your credit report. Each person has three different credit scores, one to correspond with each of the person’s credit reports. If you have a low credit score, you may struggle to get a good interest rate, or to get any financing at all. If you find any errors in your credit report, make sure you contact the agencies directly and correct the mistakes. This can take two or three months to resolve.

2) Set your budget
Once you’ve got your credit score figured out, it’s time to figure out how much you can spend on a house. A good starting point is using an online calculator. While these calculators are helpful, you will get a more accurate figure by asking to be pre-approved by a lender. This lender will assess was kind of loan is right for you by looking at your debt, income, and credit. If you are looking for a rule of thumb, you can multiply your gross annual salary by 2.5 and use that number as a guideline for the cost of your home. In addition, all of your monthly home payment should be no more than 36% of your gross monthly income. You will also need to take into account the size of your down payment.

3) Get some cash ready
For your down payment and your closing costs, you’ll need to come up with some cash. Lenders typically see a down payment as 20% of a home’s price. If you are able to put down more than 20%, your lender may approve a larger loan. If you don’t have 20%, you will need to search for loans that will help you. Low down payment mortgages can be provided through a number of private and public agencies, such as Freddie Mac, Fannie Mae, the Department of Veterans Affairs, and the Federal Housing Administration. If you qualify for these mortgages, it is possible that you will only have to pay 3% up front.

However, if you have a down payment lower than 20% you will probably need to pay for private mortgage insurance, which is essentially a safety net that protects the bank in case you do not make your payments. With private mortgage insurance, about 0.5% of the total loan amount will be added to your mortgage payments for the year.

So you’ve considered the down payment. But you still need to make sure you have enough cash to cover fees and closing costs. This includes loan fees, inspection fees, the appraisals fee, attorney’s fees, and the cost of a title search. This may add up to a sum of more than $10,000, and it will often make up 5% of the mortgage amount.

If you don’t have enough cash available to cover these needs, there are many options available to you. If you have a first time homebuyer, you can withdraw up to $10,000 from an Individual Retirement Account if you have one. There is no penalty, but you need to pay taxes on the amount. Another option is receiving a cash gift of up to $14,000 per year from each of your parents. There is no gift tax.

You could also figure out whether your employer can help, especially if you work at a big company. Many big companies will help contribute to a down payment or help an employee get a low-interest loan from certain lenders. Another option is tapping a 401(k) or similar retirement plan so you can get a loan from yourself.

4. Get an agent

The majority of home sellers list their homes via an agent. Those agents, however, work for the seller rather than the buyer. They are paid according to a percentage of the purchase price, typically 5 to 7%, so usually they will try to get you to pay more. When you need in an “exclusive buyer agent.” These agents are either paid directly by you, on an hourly or contracted fee, and other times the commission that the seller’s agent gets upon sale is split. A buyer’s agent will have allegiance only to you.

5. Look for a home.

The first part of looking for a home is figuring out what city or neighborhood you would like to live in. When searching neighborhoods, you should look for indications of economic vitality. This includes low unemployment, good incomes, and a mixture of young families and older couples. Whether you have children or not, you will want to pay attention to districts that have good schools. When the time comes that you will want to resell the property, living in an area with a good school system will allow your home to keep its good value.

It’s also a good idea to figure out the real estate market in the area. If homes in the area are selling near or even higher than the asking price, this means that the area is desirable. Doing your house hunt in the colder months of the year is a smart plan if it is possible. This is the “off season” for housing hunting, and you will have less competition, meaning that sellers are more likely to negotiate with you.

Just make sure your search criteria aren’t too restrictive. Make sure your price range is 10% above and 10% below your true range. In terms of location, search in a 10-mile radius of the location you specify.

These tips will help you to buy a the right home for you. Stay tuned for part 2 of the guide to smart home buying.