A real estate market bubble is the process of increasing the market values and prices of property due to the increase in demand or a decrease in the properties offered at that time. This leads to more competition in the marketplace as real estate agents have to balance the costs and benefits of such a fluctuation in prices. Their clients have the chance of losing interest should the prices raise too much, but the real estate agent has the chance of losing profit should they lower the prices too much.
Since pricing in real estate is relative to the prices of other offered properties, it can fluctuate unexpectedly. Some cities become extremely expensive while others stay relatively affordable compared to the rest of the state. The most expensive real estate markets tend to be the most densely populated because there are little places to build homes at. For this reason, their prices are high and clients who need a place to stay are willing to buy it at those inflated prices.
Where Are the Next Recent Real Estate Bubbles?
The next real estate market bubbles are expected to be in the following areas:
- Hong Kong
- New York
These cities are at the top of the list because there is no more space to build property or housing, so the real estate agents have to price them high enough to make profit. After spending an extreme amount of money building the properties, it has to be leveled out by the demand and costs of the area.
Up and coming cities like Chicago, Boston, and Los Angeles have yet to seem the boom and bust of the inflated prices in the aforementioned cities. There is still room to build, thus causing lower expenses to build such homes and less inflation.
Why Is This Significant?
This is a significant finding because working, living, or retiring in a certain city are heavily influenced by the cost of living in that area. If the prices of a city are inflated, then someone is less likely to want to work and live in that area.
The market for virtual reality (VR) and augmented reality (AR) is huge. Forecasters predict sales will reach $108 billion by the year 2021, and the real estate industry is rapidly making use of this technology. VR will generate $80 billion by 2025, and $2.6 billion of that will come directly from the real estate world.
Real estate agents are always looking for ways to make the home showing process easier and more streamlined. By combining VR with AR, mixed reality (MR) gives clients a detailed, immersive encounter. MR essentially helps buyers “experience a home” on another level, as well as filter out the homes they don’t want to see. This saves everyone time in the long run.
Industry members know that homes with photographs have higher perceived values, and homes with 3D capabilities have even higher perceived values. Some VR companies use smart software to stitch together photographs and provide users with an interactive, 360-degree experience.
This technology also enables international investment potential, since VR/AR can reach buyers on a global scale. Total-immersion viewing experiences are particularly useful in the niche market of luxury homes, since most of the potential buyers are internationally based. Realnyc is a virtual reality platform which allows users to tour apartments, record presentations, ask questions, make notes and share comments remotely. It’s used so frequently. It’s now common for tenants to sign a lease for an apartment they have never even visited, and one in every three home buyers now makes an offer on a house they’ve never seen in person, which is an increase over one in five the previous year.
Zillow and Realtor.com can now let users enter prices, locations, and a number of rooms as search criteria, and then present them with homes available for virtual tours. Halstead Properties have 3D displays and VR headsets in its offices, and luxury agents Engel & Völkers use virtual “theaters” in their Minneapolis office by way of the Oculus Rift headset. Sotheby’s, another luxury real estate firm, already has a massive database of 360-degree captured homes, ready for prospective buyers to view.
Even if virtual tours are unavailable, AR can still be used to help enhance existing floor plans and photos with personal items such as clients’ actual furniture. Rentberry lets people use AR to visualize potential homes by adding objects, assorted construction materials and different shades of paint to get a feel for a space. Companies like Matterport provide realistic and interactive 3D and VR experiences for potential homeowners. It used to be difficult for developers to communicate a project vision to a client. Now they can now show prospective buyers what the end product will look like.
Foreclosure can be a scary word for some people. While these trepidations around the term aren’t entirely unneeded, many people who decide to buy a foreclosed on house are getting away with an incredible deal, if they do play it correctly. The following outlines some of the things to look out and be aware for when it comes to buying a home in foreclosure.
Cons of Buying a Home in Foreclosure
Buying a home in foreclosure certainly isn’t for anyone. Especially for the inexperienced home buyer, this might not be comfortable territory. Sometimes, homes that have gone into foreclosure can be neglected by the owner and therefore ask a lot of you after the point of purchase. Repairs can get costly, and can sometimes come up unexpectedly. While you’ll usually get the house at a lower price, the repairs might come at an alarmingly high price for some homes.
Since the prices are normally lower due to banks not having to worry about paying off debts as foreclosed homeowners commonly do, people who know how to work the foreclosure market can make the purchase a competitive experience. Many homes in foreclosure are not in horrible shape, and therefore offer a good investment to interested and experienced buyers, but a challenging steal to take if you don’t know how to maneuver it just right.
Pros of Buying a Home in Foreclosure
As mentioned in some of the things to look out for, foreclosed on homes often come at a more reasonable price than usual. When a home is foreclosed on, the bank is then responsible for it. When a homeowner is selling their house, they will often jack up the price of the property because of the return they are looking for. Since banks do not have debts to motivate them when it comes to selling a foreclosed on home, a buyer will often get a better deal on the home than they may have if it was being sold by the owner.
Not only are banks more likely to give you a lower price, but they’re also more likely to sell the home quickly. The bank will not have motivation for keeping the foreclosed on home, and therefore will be more likely to cooperate and make the process move smoothly.
With these things in mind, you will be able to decide if buying a home in foreclosure is the right move to you. Its benefits can be incredibly rewarding, but it is important to be weary of the right things and ask all the right questions.
About Tracey Rancifer
Tracey Rancifer was born and raised in West Little Rock Arkansas, a city which has been influential in the way she thinks about commercial and residential real estate. She attended Rhodes College pursuing her B.A undergraduate degree in Political Science, and then University of Little Rock, Arkansas for her Masters in Public Affairs and Administration. The breadth of her work experience involves and is not limited to working as a development executive with private entities, and in the public sphere with the municipal and federal government level. Tracey Rancifer provides her clients with a solid consultation and approach to real estate buying and selling through the “Tracey Difference”, a phrase coined to distinguish her results driven approach to buying and selling properties to her clients.
Finding an agent in Little Rock takes minimal effort. However, finding a real estate agent in Little Rock who will tailor to your best interests, and those of your family’s might take a little more work. This is where Tracey Rancifer comes in. Tracey has worked as an executive in municipal government, federal government, and as corporate development executive. With professional experience and higher education, Tracey possesses the negotiating skills, logistical tools, and academic abilities to provide superior client service from contract to close during the real estate transaction process.
Tracey Primarily Focuses in these areas:
- Chenal Valley (West Little Rock)
- Wellington (Villages of Wellington)
- Central Arkansas (Maumelle)
- The Heights/Hillcrest
Tracey Rancifer is highly involved in her community, and in various real estate associations in the area. As an Arkansas native armed with lifelong personal knowledge of the area, Tracey has extensive experience in the Little Rock metro area and integrating this experience to establishing her company has proven to be very advantageous. Currently, Tracey serves on the Arkansas Home Inspection Registration Board, American Heart Association – Go Red Committee and the Arkansas Real Estate Foundation.
In 2005, Tracey Rancifer was voted real estate agent finalist in the Arkansas Democrat Gazette’s “Best of the Best” Real Estate Agent Division. Considering every real estate professional in Central Arkansas was eligible to be nominated, the distinction of being named a finalist represents Tracey’s work ethic, professionalism, and commitment to her client’s objectives.
Whether you are buying or selling, find out for yourself what the “Tracey Difference” really is and it won’t take long to discover why she really is the “Best of the Best” in the Little Rock metro area.
“Deal of the Year” Award from the Real Estate Board of New York (REBNY)
Named one of the three new inductees to the Ethics Committee of REBNY
Named to the Executive Board of New York Residential Specialists (NYRS).