Real Estate Investment Trends to Watch in the Coming Year

Introduction:

The real estate industry has always been a crucial driver of the economy. As we head into 2024, it is imperative for real estate investors to stay informed about the latest trends shaping the market. In this blog, we will explore the top real estate investment trends for the coming year and analyze how they may affect the industry. We will provide an in-depth look at each trend, supported by data and insights from industry experts.

1. House Hunting Goes Digital:

Over the last few years, we've seen a revolutionary shift toward digitization, and the real estate industry has been no exception. The COVID-19 pandemic only accelerated this phenomenon, causing a sharp rise in virtual property tours, 3D tours, and drone footage. 

Online real estate companies like Zillow have provided tools for buyers to browse listings, connect with agents, and research mortgage options, all from the comfort of their homes. According to the National Association of REALTORS®, 44% of homebuyers in 2020 found their new homes through online platforms.

Real estate professionals can no longer ignore the importance of creating a strong digital presence. According to real estate expert Marcel Arsenault, “There will be no successful real estate brokerage that doesn't have a digital platform in the next 5-10 years." Investors must embrace this trend and leverage these new platforms to remain competitive.

In addition to the shift towards digitization in the real estate industry, companies like SetSchedule are playing a significant role in democratizing the way real estate professionals connect, work, and consume leads. SetSchedule provides a powerful digital platform that connects real estate agents with potential clients, streamlines their workflow, and offers valuable insights into market trends.

2. Suburbia Surges in Popularity:

The pandemic has changed our lifestyles significantly and impacted how we view homeownership. One of the most notable trends in real estate investment is the migration from big cities to suburban areas. This shift is driven by the desire for more space, lower taxes, and cheaper housing options. Living in a suburban area provides a balance between quiet residential living and access to amenities such as good transportation, shopping, and dining.

The Sun Belt region, stretching from California to North Carolina, has particularly gained popularity due to its affordable housing, lower taxes, and sunny weather. The National Association of REALTORS® reports that suburban areas saw a 13% increase in home-buying activity in 2020. Real estate investors should take note of this trend and consider investing in suburban areas to meet the growing demand.

3. Single-Family Homes in High Demand:

In recent years, single-family homes have become increasingly popular among homebuyers. This trend has been driven by low interest rates and changing lifestyle preferences. Many homebuyers desire a comfortable and spacious home for themselves and their families. 

The pandemic has amplified the importance of having a peaceful and safe living space, which has led to a surge in the demand for single-family properties. However, the unprecedented increase in demand has resulted in a shortage of inventory, driving up prices in the market. Homebuyers are willing to pay a premium to secure the houses they love, leading to bidding wars in many markets.

According to the National Association of REALTORS®, around 71% of home sales in 2020 involved single-family homes. Real estate investors should focus on these types of properties to reap profits from the lucrative demand in the market.

4. Rising Home Prices:

As a result of the high demand and low inventory of single-family homes, prices have continued to rise. According to the Federal Housing Finance Agency, U.S. housing prices rose by 6.5% in 2020. 

This trend presents an incredible opportunity for existing homeowners, as their equity grows with every fluctuation in the market. However, on the flip side, these price hikes may pose significant difficulties for individuals looking to enter the market.

Real estate investors should be vigilant when investing in a rapidly rising market to prevent financial setbacks. Careful monitoring of the market and thorough research on the properties being considered is crucial to avoid future losses.

5. Favorable Mortgage Rates:

The real estate industry has benefitted significantly from the historically low mortgage rates. These record-low rates have encouraged homeownership and fueled the housing market. 

Low mortgage rates make buying a home more affordable for countless buyers. Many homeowners are also taking advantage of these favorable rates to lower their monthly payments or access equity in their properties by refinancing their mortgages.

Investors must stay up-to-date with the current financing trends in the market. Low-interest rates present an excellent opportunity for real estate investors to acquire a property or refinance their investment properties at lower rates.

6. Rental Market Shifts:

The pandemic has significantly altered the rental market in big cities as people opted for homeownership or sought alternative cost-saving measures. Apartments and studios in city centers have faced a decline in demand, reflecting the shift in priorities of individuals during the pandemic. On the other hand, rentals in suburban areas, especially single-family homes, have seen an increase in demand.

Real estate investors should focus on niche markets and specific demographics in the rental industry to maximize profits. For instance, investors can target young professionals who prefer to rent instead of buying.

Conclusion:

Real estate investment trends are constantly evolving, and in the coming year, there are several factors to consider. House hunting continues to transition to digital platforms, and investors must embrace the shift. Suburban areas have grown in popularity, and investors should consider investing in these areas as a potential opportunity. Single-family homes are in high demand, leading to a surge in their prices. Low interest rates have provided an opportunity for investors to acquire properties at lower rates, and the rental market is shifting drastically. Investors must track these trends closely and adapt their strategies accordingly to benefit from the dynamic real estate industry.