Forward
Although we hope to have left the worst of the pandemic in 2020, it continues to influence the way consumers behave today – specifically within the real estate market. On a national and local level, industry professionals have seen a handful of homebuying trends emerge over the last year that have made significant impacts on the housing market.
With our homes being more important than ever – as a place of sanctuary, somewhere to work, a destination for fun, and so much more – finding one that meets a person’s unique needs is imperative. Here is a look at some of the key shifts in consumers’ preferences that have brought back previously popular homebuying trends and created new norms worth noting.
This year real estate professionals are seeing an increase in the number of homebuyers looking for somewhere that they can live with their immediate and extended family members. In fact, Pew Research Center observed that 61% of adults who moved during the pandemic relocated to a family member’s home. That may be elderly parents, older children, grandchildren, and even siblings. The desire to be together stems from many circumstances, from needing to assist with caregiving, financial reasons, and lack of availability of other housing options – specifically for students and those who require assisted living facilities.
The demand for homes that cater to an entire extended family has had an impact on what kind of residences consumers are purchasing. As a result, homes with additional accommodations and amenities are experiencing a surge in sales. According to the National Association of REALTORS®, houses intended for more than one family tend to be nearly 22% larger than the standard home. The typical existing home is approximately 1,880 square feet, whereas a multigenerational residence is roughly 2,290 square feet and costs about 10.7% more. This shows that by making the decision to be a multigenerational household, consumers are opting into a more expensive sector of the real estate market.
Popular features for multigenerational homes include separate “mother-in-law” suites, detached guest houses, second kitchens and living spaces, as well as attached apartments that can be locked off for additional privacy. These spaces often serve as additional residences that keep family members close while still offering the privacy of living alone. Accommodations such as these are ideal for older parents who want to maintain their independence or adult children who require their own space while living at home.
In addition to these living spaces and bedroom suites, more people are taking future needs into consideration. Houses with main-floor bedroom suites, elevators, and open floorplans are simpler to navigate for older generations, increasing a home’s ease-of-living.
Real estate professionals are also seeing more clients searching for houses with extra rooms that can easily be converted into offices, study spaces, and studios. With the work-from-home trend sticking around, having a designated area to focus on tasks is a must. Working from home can be distracting to some, especially with more people sharing one residence, so larger homes with ample space to be used as a work or study area is crucial for multigenerational homes.
For many, family is one constant that we can rely on even as the world continues to change. With that in mind, it is clear multigenerational living is not a temporary fix nor a passing phase, but a trend that will influence current and future homebuyers as well as the markets that they decide to call home.
Since the majority of true downtown residences are condominiums with shared amenities, residents were unable to fully enjoy the lifestyle that makes living in urban neighborhoods so exciting. For that reason, many metropolitan areas experienced a population decrease during 2020. Although most city dwellers did not move far – 84% transitioned to a nearby suburban neighborhood with easy access to the city, according to Bloomberg – the additional space offered by those communities proved more attractive at the time.
In 2021, many consumers have made their way back to their beloved downtown neighborhoods, as restrictions ease and the cities begin to buzz with life once again. Looking at Colorado’s real estate markets, several communities have seen a resurgence of real estate activity in areas that were struggling to find interested buyers just a year ago. For example, attached residence sales had already risen by 93.8% in downtown Denver at the halfway mark for 2021, according to LIV Sotheby’s International Realty’s Mid-Year Micro Market Reports. Even more impressive, Denver’s trendy, street art-filled RiNo neighborhood saw property sales surge by 118.5%. During the same time frame downtown Boulder, another popular destination for those seeking an enticing and upbeat lifestyle, saw sales for all property types increase by 38.1%.
City living is ideal for people of all ages, with access to the best entertainment and dining experiences, and the added bonus of less maintenance upkeep than single family residences. For these reasons, urban living remains popular among busy professionals and people transitioning from the suburbs to enjoy their next chapter of life in a low maintenance home.
The walkability and access to public transportation also make downtown neighborhoods popular destinations. According to the National Association of REALTORS®, 62% of millennials prefer living in walkable communities that have short commutes. In Colorado’s communities featuring downtown scenes such as Denver, Boulder, and Colorado Springs, dining, shopping, and green spaces are all just a stroll away from nearly anywhere in the city, giving residents a healthy alternative to driving everywhere they need or want to go.
As more and more entertainment options become available in urban neighborhoods, more people embrace health protocols, and consumer confidence is restored, cities across the state and country are coming back to life.
As the younger generation ages, and they earn higher incomes that afford them the ability to transition from renting apartments to owning homes, the space, competitive pricing, and laid-back lifestyle that suburban communities offer have become more desirable. An article from Insider reports that 30% of 18- to 24-year-olds say they now own their homes, up from 19% last year. As more young people make the decision to invest in real estate, houses in the suburbs are being favored.
Although this trend has been prominent in the 2021 real estate market, information from the Census Bureau’s 2019 American Community Survey shows that millennials aged 25 to 39 were already migrating from major cities like New York City and Chicago and moving to states with more suburban communities like Texas, Colorado, Washington, and Arizona. Thanks to this trend, secondary markets such as Colorado Springs, the state’s second-largest city, have recently received honors such as being named home to the hottest zip code in the country by Realtor.com. The rapidly growing interest in this community, located an hour south of Denver, stems from its unique lifestyle, which combines easy access to the outdoors, a variety of urban entertainment options, and more space and affordability than its neighbor to the north.
Home values within Colorado’s suburban communities have shown immense appreciation even over the past few months. In South Metro, a community with a combination of open spaces, shopping, dining, and other amenities, home values for all property types rose by 25.3%. In Castle Pines, a neighborhood within South Metro, home prices rose even more significantly, increasing by 42.1% to reach an average price of $950,407. In West Metro, a popular destination for homebuyers looking to live between the city and the mountains, all property types appreciated by 21.6%. Home values within the West Metro community of Golden strengthen by 11.4%, bringing the average price to $768,306. These increases are positive indicators that we may see continued growth in suburban neighborhoods for years to come.
As the largest generation by population in the country, millennials have a major influence over what is hot and what is not – and currently suburban life is all the rage. While the perceptions of the suburbs may change from generation to generation, the lifestyle they bestow upon their residents will always be en vogue.
An article from Forbes stated that in the U.S., luxury homes sales surged 60.7% year-over-year during 2020 – proving that even the pandemic could not discourage homebuyers from investing in real estate and further demonstrating how important “home” is during a time of uncertainty. The tidal wave of momentum in the luxury market has sustained its power well into 2021. Consumers sitting on either side of the closing table have benefited from an active real estate market in which high-end homes are selling more quickly and appreciations at this elevated price point are remaining relatively in check.
In Colorado alone, the number of luxury home sales skyrocketed over the last year. LIV Sotheby’s International Realty reported that from January through June of 2021, there was a 151.9% increase in luxury home sales in the Denver Metro area. In the Colorado Springs market, sales during that same period grew by 206.7%. Tremendous increases have been seen through the Front Range as consumers, including Coloradans and those moving from out of state, come to the realization that this is the place to plant their roots and create the life they want.
But why are so many consumers suddenly interested in luxury homes? With more people transitioning to working from home, prioritizing their search for residences that cater to their lifestyles – and responding to financial influences such as low interest rates on mortgages – purchasing high-end homes has become even more attractive.
An article from Forbes stated that in the U.S., luxury homes sales surged 60.7% year-over-year during 2020 – proving that even the pandemic could not discourage homebuyers from investing in real estate and further demonstrating how important “home” is during a time of uncertainty. The tidal wave of momentum in the luxury market has sustained its power well into 2021. Consumers sitting on either side of the closing table have benefited from an active real estate market in which high-end homes are selling more quickly and appreciations at this elevated price point are remaining relatively in check.
In Colorado alone, the number of luxury home sales skyrocketed over the last year. LIV Sotheby’s International Realty reported that from January through June of 2021, there was a 151.9% increase in luxury home sales in the Denver Metro area. In the Colorado Springs market, sales during that same period grew by 206.7%. Tremendous increases have been seen through the Front Range as consumers, including Coloradans and those moving from out of state, come to the realization that this is the place to plant their roots and create the life they want.
But why are so many consumers suddenly interested in luxury homes? With more people transitioning to working from home, prioritizing their search for residences that cater to their lifestyles – and responding to financial influences such as low interest rates on mortgages – purchasing high-end homes has become even more attractive.
Another goal consumers are reaching through real estate is creating a lifestyle that suites their wants and needs. With the restrictions from the height of the pandemic still fresh in their minds, many homebuyers are looking for ways to attain the life they want without leaving their home. This means buying homes that allow them to pursue their dreams, such as estates with home fitness centers and meditation rooms, resort-style pools and gardens, or the amenities necessary to run a working ranch. Some consumers may need a detached guest suite that can be converted into a music or art studio, while others may seek out homes that back to natural spaces with hiking and biking trails. There are even those who wish to splurge on a penthouse with city skyline views.
Luxury homes can make every day extraordinary by allowing homeowners to live the life they love. For that reason, it makes sense that buying Colorado’s luxury homes would be at the top of the to-do list. With so many diverse communities, each with their own unique character, Colorado is a paradise for those looking for homes that feed their passions.
By Amanda Molitor
