5 Ways Home Buying Has Changed in The Last 50 Years
Over the last fifty years, the home buying market has witnessed radical changes. Generally, the cost of homes has increased drastically while the income of the average buyer has not changed that much. For instance, in 1970s, the average price of a home was eighty-seven thousand dollars. Fast forward to 2017, and the average cost of a home was one hundred and ninety thousand dollars without accounting for inflation. In this article, we are going to review five major ways in which housing market has changed in the last fifty years. These changes include:
Technology has developed so much in the last few decades. Before, real estate agents delivered offers in-person or drive-through neighborhoods looking for any potential clients. Nowadays there are online real estate websites where people search for their ideal home before making a decision. Here, the process has been made easier and more convenient for both parties. However, there are demerits to the technology surge since real estate agents have had to avail all information online, unlike before, improving their negotiation skills to persuade buyers.
The change in the mindset of the population
Fewer people are buying homes, and more people are renting. Young adults are not in a rush to own homes either because of student loans which disqualify them from owning a home or lack of income. In 1965, thirty-seven percent of people were renters, and in 2016, the percentage rose to sixty-five.
Income to rent ratio
The average rent has increased while the average income of an American has barely changed, making it more difficult or almost impossible to buy. In 1970, the median rent was one hundred dollars while the median income was nine thousand dollars. In 2010, the median rent was nine hundred while the median income was forty thousand.
In the past, spring was always the best time for selling houses. Recent buyers and sellers are not driven by seasons anymore. Buyers are more aware of the market conditions; hence, they are more hesitant about buying until they have all the essential information at their disposal.
There is a shortage of houses available for sale compared to the last fifty years. This can largely be attributed to the surge in the cost of raw materials required for constructing houses and a significant decrease in the labor force. There was a 10–13-month supply of homes in 1970, which dropped to a 2–3-month supply of homes in 2018. More miniature houses are being built compared to fifty years ago.
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