Real estate has trended upward for a long time, but it has experienced plenty of changes along the way. Airbnb resulted in a short-term rental boom, interest rate hikes of the past reduced demand for mortgages and housing prices have continued to climb through it all.Be Aware: Im a Real Estate Agent 5 House Items Buyers Almost Always Regret
Check Out: How Middle-Class Earners Are Quietly Becoming Millionaires and How You Can, TooHowever, there are a few new real estate trends to monitor, and one of the changes may be lower prices. City Lights Home Buyers manager Caleb Reits specializes in buying and selling properties in Kent County, Michigan. He shared with GOBankingRates five housing market trends buyers and sellers should monitor.Buyers Have More LeverageHousing prices have soared in recent years, but it looks like the tide is shifting. Buyers have limited funds, and vacancies have given them more leverage.With more inventory on the market, buyers have more options to choose from, allowing them to be more selective in what they buy, Reits said.The S&P Cotality Case-Shiller Index shows that single-family home prices only increased by 1.5% year-over-year in August, which is down from the 1.6% rise reported in the previous month. Its the lowest annual gain in over two years. Several southern cities like Tampa, Phoenix and Miami saw home values decline year-over-year, with some Western cities like San Francisco, Denver and San Diego enduring the same fate.
Read Next: 4 Housing Markets That Have Plummeted in Value Over the Past 5 YearsHolding Costs Will Rise Even MoreAny homeowner will tell you that the costs dont stop once you have paid off your mortgage. Property taxes, utilities, insurance, and home maintenance stay with you for as long as you own your home. Reits anticipates those costs climbing in 2026.Property taxes, home insurance and utilities keep climbing. You still need to pay for these while fixing up a house not to mention, in the winter, our guys love the heat! Reits said.It gets cold in Michigan each winter, so its understandable why people would use the heat. Southern states blast the air conditioning over the summer, indicating plenty of variability in monthly bills based on where you live. Reits anticipates these costs climbing in the long run.Smaller Homes Will Pick Up DemandNot everyone needs a large home. Family sizes have been shrinking for years, which means they dont need McMansions to make everyone feel like they have enough space. If you combine that with the higher costs of a big house, some people are looking for smaller properties.
People will buy what they can afford, Reits said. Clean, affordable properties, including smaller multifamily homes, are still moving fast because of cash flow. Its Real Estate 101 back to the basics.Deals Are Getting SlowerAlthough Reits mentioned shifts like the movement to smaller homes and buyers having more leverage, the one thing thats preventing housing prices from dipping considerably is the low interest rates homeowners locked in before the pandemic. Reits believes dealmaking will take more time and continue to be a drag on real estate markets.Many people feel locked in with their low interest rates and cant justify selling an asset to pay more and get less. This keeps supply tight but makes for a steady market overall, Reits said.Real Estate Investors Need To Set Lower ExpectationsYou can still make money with real estate, but Reits expects this shift in real estate markets is going to weed out speculators who want to get rich quickly.Real estate is no longer a get-rich-quick, online-guru scheme. Were back to the basics, where you need to know your stuff and actually provide value to people in the marketplace. All in all, its shaping up to be another solid year in real estate, he said.
Various real estate business models like long-term tenants, short-term renting on sites like Airbnb and house flipping still work. However, its going to be a bit harder, and that level of difficulty can scare off beginners and leave the pros with more opportunities. More From GOBankingRatesThis article originally appeared on
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Im a Real Estate Agent: 5 Housing Market Trends To Prepare for in 2026
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