What to Expect for Real Estate Business in 2020
The Real estate business has faced some tough challenges since the start of the Millenium. From the surge of technology to economic crisis all over the world, real estate professionals have been in the center of all the chaos.
Currently, climate change and artificial intelligence are probably the two most vigorous forces. These will shape the face of real estate business in the days to come.
Real estate business on the whole will be the pillar of the economy in many developing countries.
Investors are predicted to put more money in properties than before.
Given the recent economic boost in big powers like the United States, an increasing number of buyers will be a challenge for real estate market.
Predictions of Real Estate Business On A Global Level
Global issues like the trade war between the US and China, Brexit, Middle East crisis and Russia’s growing influence in the world are all contributing to a highly distorted market.
Investors across business lines are having premonitions which will definitely affect related markets.
Real estate however seems to still be a safe option! At least according to predictions for 2020. Let’s take a look at a few forecasts for real estate climate next year:
- Global investment market of real estate will grow substantially, especially in growing economies. Emerging economies will experience growth in their GDP and turnover. Cities and industries are growing and the real estate market will get busy providing the built environment.
- Growing cities will be the heart of Risk and Return for real estate. The surge in migration to cities will intensify in growing nations. A lot of construction will take place and this will bring opportunities to some and challenges to others.
- Artificial intelligence will be the key element of growth. The desire for green and tech homes have already moved all over the world. Internet of Things (or IoT) will be a huge consideration for property developers.
- Competition for prime assets will be intense and Sub sectors of economy will grow faster. The wealth from these growing economies will bring investors to an intense competition. Real estate investors will have to invest in growing sub sectors of economy such as agriculture and retirement.
Real estate professionals in the world should enhance their qualities and capabilities in order to be able to prevail in this growing but risky environment.
Predictions For The Real Estate Business in the United States
The US is still enjoying the recent economic boom. The Stock market is hitting high scores and unemployment figures are at all-time lows.
But economists won’t be so excited since they believe there is a recession ahead. The Real estate market is slightly ambivalent to this economic backtrack.
Let’s have a look at what is at stake for the US real estate business in 2020:
- Recession won’t be an issue. Despite growing concerns for the economy to start correcting itself through recession, real estate trends remain steady.
Experts indicate no sign of oversupply and over leverage which fueled the great recession of 2008.
- There is a lot of capital with little place to invest. Thanks to tax cuts and booming economy, investors will have a lot of capital at their hands. The trouble will be safe investment. This abundance of liquidity pushes investors to invest anyhow and face the consequences.
- No surprises for the big markets. Super real estate markets such as Austin, LA, nashville and Orlando will keep growing. The emerging areas such as Charleston, Orange county and Indiannapolis will follow suit.
- Affordability will be an issue. Despite all the economic prosperity, the rise in the minimum wage and low unemployment, houses are still hard to afford for 90 percent of the population. Prices are and will be beyond working class affordability line.
- The slow but steady push towards suburbs and senior housing. Population is growing older and millennials are becoming parents. The former means more development is needed for senior and retired citizens. The latter suggests there is a surge coming for suburban housing.
- States will take the lead for infrastructure. Federal ambitions on infrastructure haven’t been able to survive the highly politicized environment of Washington. That is why States have taken their own initiatives to improve infrastructure of their urban and rural areas. This is good news for real estate since the industry plays an important role in reconstruction and development.
How Should We Prepare?
As a realtor, there is a lot to expect in 2020. Opportunities are abundant and so are the risks.
In order to have a successful 2020, all we can do is enhance our capabilities through staying updated on trends and provide quality service.
A combination of risk taking and conservative approaches will probably keep you on track.
Areas to focus on can be growing sectors such as infrastructure, senior housing and suburban areas. More concerning markets will be property development which may not be affordable for the majority of the population.
Want to know how to improve your real estate business and get ready for 2020? Don’t miss these: