The pandemic that started in 2020 has brought big changes in the real estate industry. More people are now focusing on safety and wellness in the midst of economic uncertainty.
From the insights and proprietary data from 1,600 leading real estate industry experts, take a look at the evolving trends that are shaping the real estate industry this 2021.
Family homes, industrial properties, and other business-related buildings like data centers are continuously rising in value, while the rental market experiences a decrease in rates. Eighteen-hour cities, described by investors as a mid-size city that is seen as a feasible alternative to the Big Six markets of Boston, Chicago, Los Angeles, New York, San Francisco, and Washington, D.C., continue to dominate the overall Top 10 real estate prospects. This includes Dallas and Austin, Texas, and Nashville, Tennessee.
Home buyers and businesses are taking interest due to their eye-catching amenities, increasing population growth with a lower cost of living, homebuilding outlook, and job opportunities. Since 2020, the largest group of buyers are older millennials, aged 30 to 39 years, making up 25% to total buyers. On the other hand, 23% are buyers who are 40 to 54 years old, while the last 33% were all first-time home buyers.
As the need for lower density environments, wider space, and importance to health and safety has been the top priorities of people these days, COVID-19 has helped in accelerating suburban growth. The act of shifting away from the urban lifestyle has been fueled by remote work and higher taxes in larger cities due to the decline in tourism and business tax revenue.
More people are also expressing their interest in suburbs, making Sunbelt cities like Raleigh, North Carolina more attractive. Companies who wanted to utilize their costs are also gravitating toward cities that are business-friendly and have increasing workforces.
The rapid and unexpected transition of businesses and companies to remote work was considered to be the greatest challenge for both employers and employees. But companies who have managed to invest in digital technologies found great success upon implementing work from home policies, giving them an ideal plan of shrinking their footprints to cut costs that would benefit both sides.
Since everyone has seen the importance of cleanliness and safety of a place or establishment, the real estate industry also needs to ensure that people would feel safe and secure, especially at restaurants, office buildings, and shopping malls. So far, new services and technologies like improved heating, ventilation, and air conditioning (HVAC) systems, touch-less sensors, and contact tracing apps are seen in offices and other public establishments.
General sales of homes are growing, but slower in metropolitan areas as people see the need of saving more money and allocating enough budget on their essentials, making them opt for cities that have a lower cost of living. Aside from this, low mortgage rates with decreasing inventory resulted in continuous buyer demand, making the real estate market strong.
In December 2020, 7 out of 10 homes have been sold, and most of them are only in the market in less than a month.
Most people who are searching for houses have looked for properties online, checking property descriptions and photos to see if it fits their needs and priorities. And as a result, real estate websites who offer online listings and consultations from agents rose up as well.
While larger units are slowly bouncing back to pre-COVID rates, studios continue to experience decline in rent prices due to decreased demand — especially in metro areas. Experts stated that top retail brands will take advantage of this in order to upgrade their locations, while vast amounts of vacant space in malls will turn into distribution centers for online retailers.
Knowing that home buyers are now resorting to do their research online, real estate agents are using the best possible digital means in order to make a good impression of their listings. Agents are now using high-quality photos and some are even offering a digital home tour. In addition to this, 3-D home tours have boosted due to the pandemic.
These are just a handful of real estate trends, and some of them have already started in late 2020. But if you look more closely, all of the mentioned trends were not just driven by the pandemic, they are also driven by technology. Now, it is a challenge to tech companies on how they will utilize this opportunity for everyone’s benefit.
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