Forbes group makes predictions for 2022 real estate market and beyond
The Forbes Biz Council recently shared their insights on the future of real estate and what trends they believe will impact the market in the coming years.
The complexity of local zoning and permitting processes will become increasingly more valuable to understand. Planning and zoning offices have a major influence in master planning that governs where real estate will be developed, how it can be entitled, and for which intended uses or purposes.
Natural disasters will change the desirability and pricing of real estate. For example, the California wildfires have resulted in home fire insurance rates skyrocketing near forests that have flammable trees such as the eucalyptus tree. Meanwhile, increasingly dire hurricanes and storms in Texas, Florida and Louisiana will hurt neighborhoods that tend to be consistently impacted by them.
With population growth shifting to secondary markets and beyond, these communities often need a revitalization of their commercial districts. Older neighborhoods need to be redeveloped as well as new assets to support demand.
We are going to see more adoption of smart home technology and self-showings, and we will continue to see more investors embrace 3D virtual tours. Within five years, every property will have a 3D tour that will be used for both operations and marketing purposes.
Developers are turning to professional third-party owner representatives to assist with projects as local experts are the best resources for executing construction and real estate projects through their extensive network and ability to provide bandwidth and scalability to developers.
Mixed-use zoning will become the biggest trend and asset class. Adaptive reuse of assets from hotels becoming housing, offices becoming mixed-use, parking becoming self-storage, and last-mile distribution centers and retail transforming into experiential live/work environments.
Property tech will transform the industry such that various processes will utilize digital services. It will create efficiencies to allow professionals to focus solely on the interpersonal aspect of the business. Technology will advance to ease transactions, but it can never take away personal connections.
Per a National Association of Realtors’ recent survey, millennials made up 38 percent of U.S. homebuyers in 2021. Most of these buyers toured properties they selected online, and nine out of 10 credited photos as the determining factor. For your listings, invest in high-quality photography, virtual tours, and short films of the neighborhood.
Auction sites will boom as investors and homebuyers vie over limited inventory. You will see online sites rise as a way for buyers and investors to discover and research properties more easily. Online auctions allow investors to bid remotely on residential properties, thus reducing travel costs and expand options with virtual access to properties nationwide.
First-time homebuyers have hit the market en masse, and they will soon realize that they would like a bit more space or features and will be looking to trade up in the next few years.
Investment companies are increasingly approaching sellers with attractive cash-only deals. Over the coming years, this will result in a massive loss of transactions for agents. If you can’t beat them, join them.
As residents and tenants expect the same strong customer experience and service that they get from delivery apps and other online platforms from the places they work and live, operators that deliver on those expectations will be set apart.
The residential real estate market nationally will continue to cool off over the next three years, so don’t count on selling quite as easily as it has been in the hot market the last few years.