With the changes made in the economy by the Trump governance, the people are enjoying all the benefits, with increased employment, manufacturing jobs, lower interest rates, the real estate market is taking a strong leap. The house buying season is on the way and the real estate market is showing moderate signs. There has been a significant shift in buyer behavior. Here are 8 trends the real estate investors should watch out for in the coming years.
The homeowners in the coming years are young, and the old generation is slowly making an exit from the real estate investment park. Many of the millenials are finding better-paid jobs and are now able to afford homes. The new-age investors might look in to trade the bigger homes to smaller affordable housing options. The real estate companies too will have to take down their rates to make it affordable to the people.
The Tax Cut and Job Acts, the opportunity zones have become the most sought after investment areas by the real estate investors. These opportunity zones are now set to be the hottest trends in commercial estate investment. These programs offer attractive tax incentives have attracted a lot of investors. As the capital will flow, there will be an increased volume in many of the submarkets. And this increased liquidity will be a positive point for the real estate.
E-commerce is still an enemy
Even though e-commerce has led to financial growth and improved cash flow, it still remains a disruptor for the real estate. Commercial zones would be down with the rise of e-commerce. The retailers cannot afford the rent of the place, like the money, they make in the shops is barely sufficient. With this, if investors are looking to invest in anything it has to be the fitness centers, restaurants, salons, some things that do not have an online alternative.
The pricier rates of new construction-
The construction prices have hiked up to 0.5%. This is an important thing the investors should watch out for. The Federation has been increasing the interest rates and the material costs are also being affected by the trade policy, while even the labor costs are increasing because of the immigration policy. The changing policies are affecting the rates at every step and this is what the investors should be looking out for.
- Increased efficiency due to Technology-
The technology is being used extensively in every sector now, and it has had some unique implications for the investors who are interested in commercial property. The real estate industry is seeing a transition, where it is moving from an inefficient one to one that is being highly efficient. Because of the growing technologies such as machine learning, data analytics, and other platforms, the commercial estate ecosystem is now having better tools for decision-making.
- Build to Rent-
Build to rent is a relatively new trend emerging in the real estate markets. This is a rising sub-market in the private rented residential stock. Under this, the residential properties are specially designed for renting rather than selling. These properties are owned by the institutional investors and they are managed with service-led culture by specialist operators.
These are a few trends the real estate investors should look out for in the coming years. The rapid changes in technology and their adaptation in the real estate industry have had a huge impact in the efficiency of it. Also, the changing nature of the economic and trade policies too are affecting the real estate market.
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