The real estate market’s fluidity makes it a place where trends are always changing. Developing trends usually take a few years to enter the mainstream and become the norm. Because of this, smart agents and investors keep their fingers on the pulse of the industry so that they can adapt to those trends well before everyone else starts scampering to catch up.
To help highlight these developing trends and what they mean for the agent or the investor, Forbes Real Estate Council members discuss some of the developing real estate trends likely coming to the industry in the next few years and how those changes would impact the average investor or agent.
1. Co-Working Space As A Shared Amenity
With more and more people working from home, whether part-time or full-time, the need for a flexible co-working space is growing. A trend that we like to implement is carving out space in the clubhouse and turning it into co-working space (adding chairs, communal tables, plugs and a coffee machine). It’s not complicated or expensive and tenants simply love it. – Ellie Perlman, Blue Lake Capital LLC
2. Growing Sense Of Community
I think all types of real estate, with the exception of industrial, are being reevaluated right now to figure out how to provide a larger sense of community. We’re already starting to see it with the rise of co-working and, to a lesser extent, co-living. And on the retail side, you’re seeing major mall developers demolishing rentable space just to add more common-area amenities. – Robin Bhalla, The Festival Companies
3. Property Tech And AI Disrupting The Industry
The impact technology has on real estate will become more and more visible. Property technology is a game-changer for how agents, brokerages and investors work, and it also impacts what buyers, sellers, tenants and investors should expect. From real estate services to artificial-intelligence-powered investment platforms and digital brokerage models, the real estate industry is being disrupted. And that’s a good thing. – Julien Leclair-Dionne, HomeFluent
4. Rise Of Opportunity Zones
A clear trend emerging in real estate over the next several years is Opportunity Zones. This creature of the tax code will drive investment capital into areas identified as Opportunity Zones. The result will be some successful real estate ventures. At the same time, there will no doubt be plenty of real estate developments that should never have left the drawing board. – Mark Tiefel, Capital Equity Group, Inc.
5. Millennials Will Start Buying Houses
They are somewhat slower to buy houses than previous generations, but they are just getting into the homebuying years. According to Pew Research Center, they are better educated and more diverse (including having more women in the workforce) than prior generations, which translates into better jobs and potentially two earners per household. As people age, they buy houses—even Millennials. – Robert Jafek, Boomerang Capital Partners
6. Spread Of Shared Living Spaces
With the price of real estate always going up over time accompanied by the growing population, younger adults are finding it harder to buy in trendy populated areas. The answer to this problem is building more microcommunities. The younger generations are opting out of big mortgages and utility bills for more travel and play time. So build small, as this is the new call. – Chris Ryan, Beyond Properties Group (eXp Realty)
7. Short-Term Rentals At Higher Rates
Short-term rentals are the future. There is a growing trend for shorter-term rentals at higher rates. When managed correctly, this trend can generate higher revenue per square foot, but it requires focus to keep properties rented due to the higher turnover. – Ari Rastegar, Rastegar Property
8. Rent Control With Upzoning Measures
Two words: rent control. The affordability crisis will come to a head and result in legislative outcomes, with the major metros feeling it most acutely. While it means less opportunity for investing in already-built structures, rent control will probably be delivered with upzoning measures as well. That means ground-up new construction will be much more attractive for both agents and investors. – Ari Afshar, Compass
9. Increased Use Of Freelance Workers
Any good broker has strong relationships with lenders, inspectors, appraisers and other service providers. But there is a growing need for brokers to have a videographer, an editor, a content creator/manager, a copywriter, and on and on. Sites like Upwork and Fiverr provide agents access to remote workers at reasonable rates to get many of these tasks done so they can focus on their clients. – Ryan Moran, Option Realty Group
10. Build-To-Rent Boom
Build-to-rent is gaining popularity as a strategy for real estate investors looking to acquire new homes and hold them as long-term-rental investment properties. This trend takes advantage of increased demand for rentals, as families—many of whom are priced out of buying due to lack of a down payment or insufficient credit—choose to rent before they buy. – Gary Beasley, Roofstock
11. Modular Buildings Reshaping Construction
The construction industry is getting completely reinvented, which will have a direct impact on real estate. Modular builders are able to build high-quality new homes in as little as three months and for 50% of the cost of a traditional build. With a massive shortage of labor, modular construction is the solution. – Matthew Murphy, Renren, Inc.