Top Consumer Preferences Impacting the Housing Market
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It’s 2022 and the housing market is in a state of flux. The preferences of consumers are changing, and as a result, the impacts are affecting the real estate market in unforeseen ways. In this article, we will explore the top ways that changes in consumer preferences are impacting the housing market in 2022.
How do Consumer Preferences Affect the Housing Market?
In order to understand how consumer preferences are impacting the housing market, it’s important to first understand what consumer preferences are. Consumer preferences are defined as the wants and needs of consumers that drive their buying decisions. These preferences can be influenced by a variety of factors, such as trends, pop culture, and the economy.
When it comes to the housing market, consumer preferences play a significant role in shaping the direction of the market. For example, if more consumers are interested in purchasing smaller homes, then builders will begin constructing more small homes to meet this demand. However, if there is a shift in preference and more consumers want larger homes, then builders will adjust their construction plans accordingly.
Discreet Consumer Trends Disrupting Real Estate in 2022
Now that you understand the impact that consumer preferences can have on the housing market, let’s take a look at the top preferences that are currently shaping the market in 2022.
To get a handle on some of the less-conspicuous trends that are disrupting the housing market, FastExpert reached out to Shaun Martin, CEO of Denver Real Estate Solutions. Shaun offered his invaluable insights when it comes to understanding the overall trends that are impacting the market.
According to Shaun, he sees four top trends we should keep an eye on in 2022:
- The Sharing Economy
- The Rise of eCommerce in Real Estate
- The Shift Back to Urban Life
- The Gig Economy
While at first thought, these trends might not seem related to consumer preferences, they actually have a significant impact on the way that consumers purchase homes. Let’s take a closer look at each of these trends and how they are impacting the housing market in 2022.
The Sharing Economy
The sharing economy is defined as “an economic model in which individuals are able to borrow or rent from each other,” according to Investopedia. This model has been popularized by companies such as Airbnb and Uber.
How does the sharing economy impact consumer preferences when it comes to purchasing a home? Shaun believes that the rise of the sharing economy has “been one of the most disruptive forces to hit the real estate industry in recent years. Platforms such as Airbnb and Couchsurfing have completely changed the way that many people view accommodation, and this is having a knock-on effect on the traditional hotel and rental market,” he said.
With the sharing economy becoming more and more popular, it’s likely that we will see a rise in home-sharing and short-term rentals. This could have a significant impact on the types of homes that are being purchased and built in the future.
According to Shaun, there are a number of reasons for this. “Firstly, the sharing economy provides a much more affordable option for accommodation, which is appealing to cost-conscious consumers,” he explains.
“Secondly, it offers a more authentic experience, as people are able to stay in local people’s homes rather than sterile hotel rooms. This is particularly appealing to younger generations who value experiences over material possessions.”
But, the sharing economy doesn’t just affect the residential real estate market. It also has an impact on the commercial real estate market as well.
“The sharing economy is also having an impact on the commercial real estate market, as co-working spaces such as WeWork become increasingly popular. These types of flexible workspaces offer a more affordable and convenient option for businesses, which is leading to a decline in demand for traditional office space,” said Shaun.
So, while some believe the sharing economy is perhaps just a fad, Shaun disagrees. “The sharing economy is here to stay, and it is having a profound impact on the real estate industry. Traditional players need to adapt their business models if they want to survive in this new landscape.”
How the traditional players, as Shaun put it, adapt to the sharing economy will be a key trend to watch in the real estate industry in 2022. For real estate professionals who want to get ahead of the trend, the key will be to embrace the sharing economy and use it to your advantage.
The Rise of eCommerce in Real Estate
Another trend that is impacting consumer preferences is the rise of eCommerce in the real estate industry. The eCommerce platform, which is defined as “the buying and selling of goods and services online,” has been on the rise in recent years. This trend is being driven by the increasing popularity of online purchasing, as well as the convenience and ease of use that eCommerce platforms offer.
How will the rise of eCommerce impact consumer preferences when it comes to purchasing a home? Shaun believes that “The rise of eCommerce has changed the way that people shop for homes. In the past, buyers would typically work with a real estate agent to find a suitable property. However, now more and more people are using online tools to search for homes.”
While many agents know the value of an online presence, some have been slow to adapt to the trend. This is likely due to the fact that they are used to working with buyers in person and may not be comfortable using technology to market their listings or communicate with clients.
However, as Shaun points out, by not using eCommerce to your full advantage, you are at risk of being left behind. “The main reason for this shift is that eCommerce provides a much more convenient and efficient way to search for homes. Buyers can easily compare prices and find properties that match their specific needs and budget. In addition, they can do all of this from the comfort of their own home,” he explains.
And, if a real estate professional is not following where the market is headed, they are at a strategic disadvantage.
“The rise of eCommerce is also having an impact on the way that real estate agents operate. Many agents are now using online tools to market properties and connect with potential buyers. This shift is likely to continue as eCommerce becomes even more prevalent,” said Shaun.
As eCommerce continues to grow in popularity, it is likely that we will see more real estate professionals using online platforms to market their listings and connect with potential buyers. For those who want to stay ahead of the curve, it will be important to welcome this movement and use it to your edge.
After all, not only do these tools make it easier for buyers and sellers but for agents, as well. For example, an agent can now use an online platform to show 3D models of a property, which can help to increase interest and engage potential buyers.
What’s more, as eCommerce platforms become more sophisticated, they will likely offer even more features and benefits that could be of use to real estate professionals. For example, some platforms may eventually offer the ability to handle transactions or even provide financing options for buyers.
All of this convenience means you can free up your time to focus on what you do best: helping people buy and sell homes. And, to drive that point home, Shaun offered this perspective: “The rise of eCommerce is changing the way people shop for homes. This shift is having a profound impact on the real estate industry, and traditional players need to adapt their business models to stay relevant.”
The Shift Back to Urban Life
Another fascinating trend that is impacting consumer preferences is the shift back to the city. According to a recent report from the National Association of Realtors, millennials are steering the shift as they enter their 30s and begin to start families. “Convenience to their job and commuting costs were both more important to this group,” the report states.
This trend is being driven by a number of factors, including the high cost of living in suburban areas, the desire for more walkable neighborhoods, and an increased focus on environmental sustainability. Another phenomenon affecting this trend was “The Great Shuffle” brought on by the pandemic.
For real estate professionals, this trend represents both a challenge and an opportunity. On the one hand, you will need to be familiar with urban areas in order to meet the needs of your clients. On the other hand, this trend provides an opportunity to tap into a growing market of buyers who are looking for properties in these areas.
As Shaun notes, “The increasing popularity of city living is driving demand for urban real estate. More and more people are moving to cities in search of better job prospects, a more active lifestyle, and a greater sense of community. This trend is being driven by millennials, who are the largest demographic group in the world.
As cities become more populated, there is a greater need for urban real estate. This includes both residential and commercial properties. Developers are responding to this demand by building more high-rise apartment buildings and mixed-use developments.”
So, it is entirely likely that 2022 and beyond will see continued growth in the urban real estate market. This presents both challenges and opportunities for those in the industry. Be sure to stay ahead of the curve by keeping tabs on this trend and being ready to meet the needs of your clients.
The Gig Economy
Although this has been a topic of conversation for some time now, the gig economy is still very much in its early stages. And, as it continues to grow, it is likely to have a major impact on the real estate industry.
The gig economy is defined as “an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements.” In other words, it is a labor market characterized by the prevalence of short-term contracts and freelance work.
This trend is being driven by a number of factors, including the increased use of technology, the rise of the millennial workforce, and the changing nature of the workplace.
For real estate professionals, the gig economy presents both challenges and opportunities. On the one hand, you will need to be adaptable and nimble in order to meet the needs of your clients. On the other hand, this trend provides an opportunity to tap into a growing market of buyers who are looking for properties that suit their lifestyles.
As Shaun comments, “The growth of the gig economy is changing the way people live and work. More and more people are choosing to freelance or work part-time, which gives them greater flexibility and autonomy. This trend is being driven by millennials, who value work-life balance.
And, the millennial lifestyle is changing, as well, due to more people than ever before working from home. This is having a major impact on the real estate market, as people are looking for properties that suit their needs.
“More people are working from home, which is leading to a decline in demand for office space. In addition, the growth of the sharing economy is making it easier for people to live in smaller homes or even rent out rooms in their homes,” Shaun said.
So, while there seems to be some conflict between the work-from-home trend lessening the demand for office space and the shift to urban areas, ultimately, both of these trends present opportunities for those in the real estate industry. in order to seize the opportunities, though, real estate professionals will need to be adaptable and have a deep understanding of the needs of their clients.
A Final Thought
Sometimes it is easy to forget how intricately woven the real estate industry is into the fabric of our lives. And, although it may be easy to take for granted, the fact is that the real estate industry plays a critical role in our economy and society.
As we look ahead to 2022 and beyond, there are a number of trends that are likely to have a major impact on the industry. While these four trends are certainly not exhaustive, they provide a good starting point for thinking about the future of the real estate industry from a different perspective.
And, a new perspective will make all the difference in your ability to succeed in this ever-changing industry. So, be sure to sign up with FastExpert so you can stay ahead of the curve and be ready to meet the needs of your clients.
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