Every year presents new and unique challenges to real estate investors. As 2018 draws to a close, it’s time to take stock of what's on the horizon. What emerging real estate trends that will shape the market in 2019 and beyond?
Experts from the Forbes Real Estate Council recently presented their ideas on what factors will shape the world of real estate in the New Year. Here are three major trend areas to watch as we prepare to flip the calendar to 2019.
Trend 1 – More big shifts in prices and rates
2018 showed us that first time home buyers (millennials in particular) are more willing than ever to consider smaller homes. In 2019, it’s fair to expect that trend will continue. However, these small homes could become more luxury-focused as buyers try to wring more bang out of their buck.
“I think we will see a seismic shift in what luxury looks like,” said Elizabeth Ann Stribling-Kivlan in Forbes ”There's now a real opening for the "tiny house movement" to be synonymous with luxury.”
But someone still has to build those homes. Though 2018 brought some relief, the construction industry is still lagging behind demand for housing. Limited inventory means rising prices, and a strengthening economy means rising interest rates.
That’s not necessarily bad news for investors, though. Timing the right purchase ahead of a bump in prices could mean a very substantial return on your investment. Do your due diligence with these market trends in mind. Rising prices in 2019 could be a win for your fix-and-flip project.
Trend 2 – Real estate emerges as a support to big business and environmental living
Commercial real estate isn’t necessarily the domain of the fix-and-flip investor, but it’s an important trend to watch. According to Christopher Kelly, real estate “will evolve from being a commodity to a strategic weapon in the war for top talent that will be won and lost on experience.”
As big companies expand into new areas through commercial real estate, their workforce will need somewhere to live. Fix-and-flip investors can take advantage of this trend by targeting properties that support a moving workforce.
Outside of the world of big business, more buyers are beginning to see their home as an asset in the fight against global warming. Therefore, green real estate investing should be a key focus of any fix-and-flip investor. Targeting properties with environmentally friendly features or adding them during renovations could open up your investment to an entirely new market of buyers.
Trend 3 – Technology and real estate will become more intertwined than ever
The world of real estate is already very dependent on technology. Sites and apps like Zillow and Trulia, for example, have revolutionized the home search process for millions of buyers. Zillow receives as many as 160 million visits every month and even began buying houses of its own in 2018.
These trends only figure to continue as data gathering and usage becomes more prevalent in the real estate industry, especially in one key area: artificial intelligence.
“The next big arms race in real estate may involve artificial intelligence,” said Ashkan Zandieh, who believes AI could help investors identify new profit sources they may not have otherwise considered.
But whether it’s AI or just a new real estate app, technology is likely to play an even bigger role in the world of real estate than ever before.
