From the beginning of 2020 and the COVID-19 pandemic, the economy has been through some particularly turbulent and challenging times. Countries closed their borders, offices and stores emptied out, the stock market tanked, and the real estate sector quickly felt all subsequent changes. The last few years certainly were unprecedented, but the economic environment isn’t as devastating as we predicted. In fact, the economy bounced back from the pandemic in record time and the real estate industry returned to normal, coming with new trends and tendencies as a result.
New need for homeownership
The increased need for homeownership, especially among Millennials, is a rising real estate trend that doesn’t seem to be dying down anytime soon. The coronavirus pandemic has heightened the importance of owning a home for this generation, likely due to the safety, security, and freedom that personal properties provide. However, other factors played a critical role as well. Mortgage rates nearly reached a historical low in recent years and the real estate market presented plenty of opportunities for different demands and types of buyers. Not to mention that Millennials are slowly getting older now, and are also becoming more financially stable, thus making homeownership the only logical next step.
Rise of more livable homes
The COVID-19 lockdowns and restrictions also forced us to spend more time at home and work remotely, which consequently shifted the focus on larger and more livable homes. It seems like simply owning a home is not enough; properties need to have larger open spaces and additional rooms that can double as home offices as well. As certain homeowners also decide to create dedicated recreational areas or extra bedrooms to accommodate family members, this trend will likely continue to rise in the upcoming years. Another tendency that has been noticed is the fact that prospective buyers now look for ready-to-move homes rather than properties under construction, possibly due to bad historical experiences.
Increasingly competitive market
Although positive in general, no sudden change is that good for the real estate environment. It seems like buyer behavior has drastically changed, encouraging them to choose established developers and trusted names in the industry over their smaller competitors. This tendency to prioritize the big players combined with the increased need for homeownership and the rise of more livable homes also created a noticeable shift in the market. In turn, this has caused a further consolidation of the market, leading to an even more competitive seller and buyer housing market as a result.
Change in location preferences
The ability to work from home combined with a new need for freedom and slower lifestyles also gave rise to different location preferences. Rather than spending time in congested cities and wasting money on unnecessary commutes, people are now deciding to choose the work-from-home option and move to peripheral areas, smaller towns, and rural spaces. As a result, new locations are becoming popular among renters and buyers alike. For instance, affordable Abilene apartments for rent are now being favored among professionals, slowly becoming one of the top cities to live in Texas this year. Given that rent is lower, amenities are aplenty, and life is more enjoyable here, this truly comes as no surprise.
Novel focus on digitization
The real estate industry has been relatively slow to adopt technological advancements, but this is changing after the pandemic as well. A novel focus on digitization is now present in the sector. Developers are beginning to realize that they have to meet prospective buyers on all platforms in order to remain competitive, which is why they are adopting digitization quite rapidly and prioritizing new trends such as virtual home tours. They have also been quick to adopt virtual reality (VR) and artificial intelligence (AI) in an effort to expand their digital footprints, whether it’s through virtual tours, property management, capital deployment, or transactions.
Reemergence of commercial spaces
Despite the rise in remote working, the commercial real estate sector has still experienced a reemergence after the pandemic, and a new increase in demand. Countries such as India, for example, have launched additional real estate investment trusts (REITs) in the last few years, which attracted plenty of attention from international investors and motivated both developers and financial institutions to accelerate their processes of listing through REITs. A few other real estate trends can be noticed in the commercial sphere, such as warehousing, data centers, and IT parks. They are expected to grow even further in the upcoming years, with data centers becoming one of the most sought-after asset classes.
Increased popularity of coworking areas
Coworking spaces have been steadily growing in popularity over the last decade, but the emergence of the pandemic brought this rise to a halt. As business centers start opening up again and companies try to adapt to the new normal, coworking areas are trending once again. However, they aren’t only popular among freelancers anymore. Entrepreneurs and business owners are now joining coworking spaces as well. This allows them to avoid working from home, maintain a stricter schedule, and be more disciplined. It might also prove to be more flexible and cost-effective compared to traditional offices, which benefits startups and small businesses the most.
As the world changes drastically, real estate trends tend to follow. The tendencies mentioned above are just some of the most prominent ones that are predicted to have the largest impact on the industry as a whole in the near future.