As the number of millennials entering the real estate market increases, the industry is set to see many changes and a higher level of uncertainty than in years past. Retiring baby boomers will make way for these millennials looking to buy homes, which when combined with the constantly fluctuating economy, will have a profound impact on Palm Beach luxury real estate, as well as the real estate industry as a whole. Below are some of the issues that will surely come under scrutiny throughout the coming year.
Both the older, working generation and newly employed, young professionals are showing greater interest in city life, rather than finding a home in the suburbs. This raises interest in city residences and may hinder the value of suburban homes and communities.
2. Demographic shifts
Baby boomers are retiring and millennials are filling this gap. This creates an influx of new homeowners and also a rise in retired boomers looking for senior residences, smaller homes, or assisted living facilities.
3. Rising interest rates
Though rates currently continue to remain at record lows, many predict that they will see a rise during this coming year. This may mean an increase in short-term commercial development, as well as slower home sales. However, if millennials enter the housing market before the jump in interest rates occurs, it may provide a quick boost to the residential market.
4. Instability of the global economy
While the U.S. dollar remains strong, the global economy continues to dwell in uncertainty. Though investments from foreign buyers do boost the domestic housing market, a continual decrease in the value of foreign currency could create issues in the long run.
If you’re wondering how these issues will affect the luxury real estate market, or are looking to buy or sell a waterfront home in the Palm Beach area, Jack Elkins would love to meet. Jack has plenty of experience with luxury properties in Palm Beach and will help answer any questions relating to luxury real estate.