RealEstateNews 2.3.25
Weekly News Roundup
- AI Transforming Real Estate
- Women and Youth Driving Luxe Properties
- California Triple Threat to Home Buyers
AI Transforming Real Estate
The real estate industry is embracing AI for enhancements across a wide range of applications. From helping sellers determine the right listing price to empowering property managers with automated tools, AI is streamlining operations and enhancing customer experiences across the board. When it comes to setting the ideal price for a property, there are a number of variables and factors to consider. AI is now helping make this process more precise through automated valuation models (AVMs). These models are able to quickly analyze a variety of different data points such as historical sales data, market trends, and specific features for each individual home to provide accurate pricing recommendations, ensuring properties are neither undervalued nor overpriced.
For real estate investors, property location and timing of purchase are always critical factors. However, finding the right property often requires sifting through countless data points which can be incredibly time consuming. With the help of AI, investors are able to simplify this process significantly, having AI tools do a lot of the work, saving time and allowing for more data-driven decision making. By analyzing market trends, neighborhood statistics, and rental demand, AI tools pinpoint opportunities in prime locations.
AI not only helps sellers and investors, it also helps buyers find their ideal homes. Real estate tools leverage AI to deliver personalized property recommendations tailored to individual needs and preferences. AI tools are able to factor in a variety of different personalized preferences for individual buyers such as school districts, commute times, and even proximity to various amenities such as parks, gyms, libraries, or restaurants. Taking all these individuals factors into consideration, AI tools can then suggest neighborhoods and properties that fit that individual buyer’s lifestyle. Additionally, AI is stepping in to automate certain tasks such as rent collection, helping scheduled maintenance, and communication to tenants. Source: Forbes
Women and Youth Driving Luxe Properties
New demographics may change the luxury market in coming years. Younger generations — including millennials and Generation Z — are entering the market with more wealth and higher standards than older generations. Sotheby’s identified millennials as the second-fastest growing group of homebuyers in the country, accounting for 38% of the market. A report by Cerulli Associates estimates that $84 trillion will flow from older generations to their younger family members by 2045. “Many young buyers are using an inheritance to purchase their first home or to trade up to their second,” Sotheby’s said. “Wealthy parents are also buying homes for their adult children, in some cases with money placed in a trust.”
Women will also overtake a portion of the market. Sotheby’s said that women will command $34 trillion — or 38% of all investable assets — by 2030. And the Bank of America Institute said that intergenerational wealth transfers “will contribute to women controlling more wealth than ever before.” Younger women lead the charge when it comes to homeownership, with most pursuing wealth building opportunities and autonomy. “They are financially savvy and know what they want,” said Marsha Burke, Sotheby’s global real estate adviser. “Financial autonomy is the overarching theme that has propelled the number of women purchasing their own homes.” Source: HousingWire
California Triple Threat to Home Buyers
Before the fires California was grappling with soaring home prices and rents, interest rates that were higher than what some are used to, and insurers that were pulling back. Now, it’s likely to get worse before it gets any better. Redfin chief executive Glenn Kelman predicted the change could be altogether radical. “California was the place that just perfected NIMBY-ism,” Kelman said, referring to the not-in-my-backyard crowd that tends to oppose development in their neighborhoods.
“So many of our economic troubles, so much of this generational malaise tracks back to home prices increasing at an unprecedented rate, especially during the pandemic, and then interest rates going up, and now insurance going up.” With that third pillar assured to engulf the region’s owners and renters, the ultimate impact is unclear but it could be severe. Kelman continued: “It’s a bit of a triple threat that we’ve never seen before.”
Builders fled California because of how hard it was to build anything because of local control, neighborhood opposition, land-use regulation, environmental reviews, lack of land, you name it. But it is time to build. Legislation has been passed in recent years to make it easier to build homes, and even more attention is on the issue now that the state desperately needs to rebuild in cities destroyed by the fires. “You have to have a hole in your head as a builder not to come back to California at this point,” he said. “You’ve got a very friendly government…and suddenly there’s whole neighborhoods that need to be rebuilt,” Kelman said. Source: Fortune