ForSaleByOwner.com, a national real estate services company that allows home buyers and sellers to connect online without the need for a real estate agent, makes the following predictions for real estate in 2006:
1. Shrinking bubble means home sellers seek alternatives. According to industry data, 10 percent of home sellers used a discount method in 2005. As home sales soften in 2006, savvy consumers will keep turning towards alternatives like no-commission services and discount Realtors to save money on real estate transactions in a softer market.
2. From “for sale” to “for hire.” The number of working Realtors will decrease in 2006 as slower home sales crunch salaries.
3. New construction costs will rise. The price of new construction will rise in 2006 due in part to the volume of materials earmarked for hurricane victims. As a result, consumers will want to buy in more established neighborhoods where they will be able to find better deals.
4. Renovations turn up the heat. Renovation spending in 2006 will reflect the need to offset skyrocketing heating bills. Budgets for fireplace additions, insulation and window sealants will increase dramatically, and more home buyers will seek out these features as they shop for homes.
5. Relocation shake-up. Consumers will relocate in record numbers in 2006 after a tumultuous year that brought hurricanes and mudslides to the coastal communities in the Gulf Coast, Florida and California, and the closing of several military bases across the United States. Expect home sales away from storm-ravaged coastal communities and more activity in military towns like Colorado Springs, Colo.
6. Online Open Houses. It’s estimated that more than 74 percent of home buyers currently look online before viewing properties in person. But in 2006, consumers will also be able to log on to view real-time virtual open houses that feature video tours and online question-and-answer sessions. These features are especially important for people relocating or buying vacation homes.
ForSaleByOwner said its revenues and listings have grown 100 percent year-over-year since 2001, and that site traffic has grown by 125 percent year-over-year. More than 40,000 homes were listed with ForSaleByOwner.com in 2005, up 45 percent from the previous year and there are currently 55,000 FSBO and foreclosure homes listed on the site.
The company estimates that it saved consumers more than $500 million in real estate commissions in 2005.
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