Some of the big factors that will affect real estate in 2018 include an increased housing supply, the introduction of Gen Z to the real estate market and the growing senior population. A shift towards smaller homes with better amenities and the ever-growing sharing economy will also play a role in housing trends. 


While housing experts predictions for 2018 tend to vary, the steady economy will lead to more building and increased prices. Here’s what we’re seeing as the main trends in the real estate industry so far this year.

Housing Supply Will Start to Improve

One of the major housing issues over the last three years was a lack of affordable housing. As 2018 progresses, we should start to see supply catching up with demand. While the problem will not be completely solved, new housing will be coming on the market in the second half of 2018.


real estate trends


Opportunities are waiting for builders who are willing to build smaller, lower-cost housing. Many would be home buyers are unable to find a home that meets their need and is reasonably priced. Millennials and Gen Z make up over 150 million potential new home buyers, and they are looking for smaller, more affordable homes in core urban areas. The supply of condos and town homes will begin to rise as builders shift focus to meet demands.


Some of the factors that have influenced the housing shortage include foreign buyers purchasing a high number of properties. Along with rising home prices, new home supplies have been focused in the higher end of the market.

Smaller Homes Becoming Desirable

Big houses with big bills and heavy maintenance requirements are no longer in high demand. As a result of larger debt and greater environmental awareness, youth are trending towards smaller, more energy efficient homes. They are looking for “starter” homes in urban areas. Condos, townhomes and tiny houses that require little maintenance and are less costly than big homes.


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Baby boomers are also increasing demand for smaller more affordable housing. As they retire, and their children are buying homes of their own, they no longer need their large family homes. They also no longer want the burden of caring for a large house and property. Condo popularity is growing as they offer a low-maintenance environment with other like-minded people.


The green movement is also helping push the small housing market forward. In fact, those who put the environment as one of their top concerns are taking it one step further and are turning to “tiny housing”. These tiny homes of less than 500 square feet are affordable, have a very small footprint and are often movable. We are seeing a generation of young entrepreneurs who are making a living by working while they travel. And now they take their homes with them.

A Shift to Community Living

We are also seeing a shift towards community housing. Young buyers want affordable homes, that are technology driven with plenty of amenities. Living in smaller spaces means buyers are looking to expand their living space with outdoor and common areas. Whether it’s a courtyard, a shared pool or a park, expanded features are what young buyers are looking for. Millennials are seeking a ‘live / work / play’ lifestyle that can be achieved in these communities. 

Increased Rental Market

US homes are at their highest value ever, making it harder to sell big houses in affluent neighborhoods. Some homeowners who are unable to sell are turning to renting instead. As a result of the housing shortage and extremely high prices, there are more renters now than in the last 30 years. So both supply and demand are increasing.


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Short-term rentals are also on the rise. The sharing economy has changed the way people look at accommodations when they travel for leisure or business. This presents an opportunity for both home buyers and homeowners.


Buyers can now look at making rental income from vacation properties which makes the prospect of a costly second home more appealing. Homeowners can generate income from renting a room or portion of their home. This allows them to purchase a more expensive home, or to stay in a home they were considering leaving for financial reasons.

Demand for Senior Housing Growing

The demand for senior housing continues to grow as the largest segment of the population starts to look at moving from their family homes. Predictions of a massive need for assisted living were off, and now the challenge is to create enough affordable independent living opportunities. Baby boomers are not willing to accept a generic room with no amenities.


Today’s seniors are looking for apartments and condos or shared accommodations that fit their lifestyles. They are more independent and active than the seniors before them, and they want housing options that reflect that.


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Those that are transitioning to assisted living homes, are looking for similar things. Exercise areas, fitness classes and on-site health-and-wellness facilities are popular requests.

We’re also looking at a shift in the location of senior housing.


Seniors want to stay in the neighborhoods they have become familiar with or where their families live. So, we will start to see a trend of more living facilities in residential areas. But they still want to have amenities such as pharmacies and medical centers nearby.


Getting Started with Real Estate 

It’s still early in the year, so changes will continue to develop that could shift the market in different directions. If you're looking to buy or sell in 2018, visit the Pattisall Group for expert advice on finding your dream home on Hilton Head Island.