When you want to understand people, you can study many aspects of their lives to see certain trends and changes. One area that’s very interesting to take a look at is real estate. How people buy, sell, invest in or use property tells us a whole lot about where society is and where it’s headed.
The last year has given us tons of patterns and data points that show the things are changing in the economy, and things investors need to be paying attention to. Here are 3 real estate patterns that emerged in 2020, and what they are telling us about the economy or the behavior of consumers.
Here’s what these real estate trends tell us about the economy
The Rise of the ZoomTown
It used to be that the hottest, most in-demand and expensive real estate markets were places like New York City, San Francisco and other cities where people would flock to, but nowadays we’re seeing something very different. What do towns like Cary North Carolina, Frisco Texas, Carmel Indiana and Gilbert Arizona have in common? They have become known as “Zoom towns”, places where people have migrated to or go on extended vacations to while they also get to work remotely.
Some of the movement we’re seeing is driven by a lower cost of living elsewhere, or just the fact that smaller cities and towns offer an enhanced quality of life. Either way, with the promise that work from home is going to continue, and even grow, we can expect more Zoom towns to sprout up across America.
From this trend, we learn that once you give people more location freedom and a chance to work from anywhere, they are going to move to towns that suit them. They are going to want to make their lives better, and with the freedom to telecommute, larger cities might start to lose their allure. On an economic level, there are going to be benefits to smaller towns as the increase in residents can bring new businesses and new wealth into the area.
Home office allows us to work from anywhere
Savvy homeowners who use the market shifts and movements to their advantage can truly make their financial situations better. This manifests in many different ways, which we saw a lot of in 2020. When demand for homes turned the market into an extreme buyer’s one, many homeowners were able to make more money from it. People selling their homes discovered that they would end up in a situation with multiple offers and selling well over listing price. This meant that when they sold their home, they would make enough money to not only get a gain in their initial investment, but way more money above that, which they could use for investments or other pursuits. With interest rates being historically low, other homeowners used that to refinance their mortgage or even use their home equity for a loan. With this kind of strategy, you have to know the reverse mortgage pros and cons before you go forward, but if it’s suitable for you, you can take advantage of the real estate market to improve your financial footing. These trends show us that there are smart ways to use market conditions to capture more opportunity.
Be smart and follow the market trends to capture better opportunities
Taxes Drive Movement
Once upon a time, California experienced a massive population boom because it was seen as a hub of opportunity. In 2020, this changed, as the state began to lose people and businesses alike to states like Texas and Arizona. Companies like Oracle, and HP are just some of the big names that come up in conversations about the mass exodus out of California. It’s not just businesses, people are also leaving in droves settling in cities like Nashville. What’s motivating this? Mainly financial reasons, more specifically fleeing the higher tax and higher costs of living in California. As is the case with so-called Zoom towns, the ability to work from home opens up an entire country to live in and people are taking that up.
Real estate is a pivotal aspect of human life. There’s truly nothing as important as the roofs people have over their heads, and what they represent. From massive migration patterns to incredible market opportunities that people can take advantage of, we can learn a lot and make better decisions that can boost the economy and enhance the lives of so many Americans. Real estate is a great microcosm of human lives, and if we really pay attention to it, there is a wealth of information we can glean and use.
Because of financial reasons a lot of people choose smaller towns to live in
Choose the town and neighborhood you are going to live in wisely