Top 5 trends in real estate today

Walkable neighborhoods and energy and water efficiency are key

Published: June 13, 2014 04:00 PM

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Hundreds of homebuilders, economists, journalists, and other real estate professionals descended on Houston this week for the 48th annual conference of the National Association of Real Estate Editors. It was NAREE's biggest turnout ever, another sign of the improving housing market—that and the fact that new homes starts will be up 18 percent in 2014, according to the market research firm MetroStudy. But as the industry rebounds, there are some key changes happening with how our homes and communities are being built. If you’re looking to get into the market, it pays to be on the right side of the pendulum. 

Energy efficiency is everywhere
The tagline for this year’s conference was Uptown Energy, a nod to Houston’s bustling energy corridor, where the bulk of the city’s development is taking place. And energy was on the lips of many panelists and presenters, especially with regards to efficiency, which has become one of the most coveted features among home buyers. That’s true even at the upper end of the market, where wealthy homeowners don’t have to sweat steep utility bills, but still they want their homes to run at optimal efficiency. 

And you should too, no matter your tax bracket. As you search for a new home, look for signs of efficiency, such as Energy Star appliances, a well-insulated attic, and high-efficiency windows. You can also ask the seller to provide their last year’s worth of utility bills, to better understand how much the home will cost to run. 

Credit is king
Most Americans still can’t afford a mortgage, according to Anthony Hsieh, CEO and founder loanDepot. The average FICO score on mortgages stands above 750, compared with 710 in 2010. If you have solid credit, you’ll be able to take advantage of the still historically low interest rates. If not, you need to get your score up, and quick, since economists expect mortgage rates to tick above 5 percent in 2015. 

You might be able increase your score by 50 to 100 points fairly quickly with a few prudent moves. These include cancelling any credit cards that you don’t use regularly, increasing your monthly payments on cards with accrued debt, and resolving any past disputes with lenders.

If you already own your home, with a favorable locked-in interest rate on the mortgage, you might want to think twice about selling. That’s because the new rate on your next mortgage will almost certainly be higher, reducing how much home you can afford. Instead, it might make more sense to remodel the home you have.

Lifestyle amenities are appreciating
For the first time ever, today’s kids might have shorter lifespans than their parents, said Rachel MacCleery of the Urban Land Institute. And grown-ups aren't exactly models of perfect health, Indeed, 1 in 3 of us are now obese, compared with 1 in 8 in 1970. These facts are helping to highlight the profound impact our built environment has on overall health. 

As you’re assessing prospective neighborhoods, look for amenities that will promote a healthy lifestyle. A multi-modal transportation system, with various mass transit options, is perhaps the most important component of a healthy community. “People want to live closer to work and they’re looking for modes of transportation that don’t involve getting in their car,” said Bob Eury, executive director of the Houston Downtown Management District, referring to the burst of walkable residential development happening in his city. 

Other lifestyle amenities to look for are streets that promote walking through the presence of trees and smooth sidewalks, an extensive network of bike trails and lanes, access to nature, and playgrounds that aren’t walled off from the community. For more information, check out Charles Montgomery’s Happy City, which took home gold in NAREE’s 2014 Robert Bruss Real Estate Book Awards.     

Water efficiency is rivaling energy
Nearly 2 billion people are projected to live in scarce-water regions by 2015. In the U.S., groundwater depletion rates are accelerating at a rapid clip, and the western drought is creating severe stress for farmers and cities alike, according to the Counselors of Real Estate. That’s putting a premium on water efficiency, including water-smart landscaping, even for people who don’t live in a drought zone. In a Consumer Reports 2013 survey, almost a third of homeowners who made changes to their lawn the previous year reduced its size in some way, for example, replacing grass with patio space, ground cover, flower beds, or even artificial turf.

In addition to a water-smart landscape, your next home should feature water-efficient fixtures, including its toilets, faucets, and showerheads. The savings can be significant, as water costs continue to rise in many parts of the country.

Online real estate is exploding
If you’re buying a home (and even if you’re not) you’ve probably visited Zillow,, or one of the many other real estate websites. And the sector is only getting noisier. Back in March, announced a $50 million investment from Google. And new players are launching all the time, each with their unique claims and technologies. One of the latest is called Surefield, which creates virtual tours of homes using high-tech 3D video. That could mean an end to time-consuming home tours that eat up your weekend.

The move to mobile is the other big shift. Every real estate site has one or more apps that allow you to access information from the field. Trulia has apps designed for homeowners and renters alike, as well one designed for real estate agents. That gets to a key question: with so much information available to consumers, do we still need agents? For now, agents aren’t going away. But the smart ones are learning how to pivot. “This is an opportunity for agents to reinvent themselves and figure out what their value proposition is for consumers on a go-forward basis,” says Rick Sharga, executive vice president at The same could be said for housing as a whole, as the industry continues to rebound.    

Daniel DiClerico (@dandiclerico on Twitter)

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