The real estate market is one of the most important markets in the world. It can be tough to predict at times, and like anything, it is being influenced all the time by technological and economic changes. The real estate market in 2020 is likely to prove a different market to that of previous years, as we see some relatively big shifts.
Understanding real estate trends is vital for anyone working in the industry, from real estate investors to commercial property management companies, an understanding of the market is nothing short of essential. So what are some of the things we can expect to see in 2020 and beyond?
The economy declined somewhat in 2018, but real estate investment rose by nearly 20%. The real estate market is often seen as a very safe investment, and there are a lot of industries that are nowhere near as secure. There is more domestic activity now and this means more investment coming to the property and real estate sector.
Investments can be made into all sorts of real estate, and when you think of property developers you might not consider things like construction and logistics, these areas are a hotbed of investment right now as we continue our growth as a society.
Real estate is always an important area for investors to consider, and brick and mortar is one of the safest options out there. Expect investment to continue to increase as people exercise caution.
Millennials Make Up the Majority of Buyers
A new decade, and finally, millennials have taken over the buying of most properties. Boomers and generation X were previously doing more of the buying, but millennials have caught up. Many economic factors have meant the uptake on spending money on real estate has been slow, and it has been difficult for a lot of millennials to get themselves involved in real estate, but finally from 2020 onwards we expect that they will take over.
It’s estimated that around 40% of property sales will involve millennials making the purchase.
Shift to Second-Tier Cities
The prices in the first-tier cities have become absolutely huge. There are plenty of second-tier cities that are growing, and this is leading to a lot of investment from companies and individuals. As costs drive people away from the bigger cities, expect second-tier to pick up a lot of this new investment.
For instance, real estate prices in LA may not make any sense for certain businesses or for individuals to purchase homes. The movement to a second-tier city can be more economically viable for a business or commercial property, as well as for individuals looking to buy a home for themselves or for investment purposes.
Interestingly, the housing market in New York and LA is seeing very little growth, especially compared to some of these second-tier cities. This is a big sign of the shift we are starting to see, and expect to continue into 2020 and the start of the next decade. Second-tier cities could become some real hotbeds for activity, too.
Use of New Technology
Unless you’ve been living under a rock for recent years, you will know that technology changes everything. It has changed the way we catch a ride, it has changed dating, and it is changing real estate. We think there will be some huge new technologies in 2020 and beyond that can revolutionize the world of real estate for both buyers and sellers
The real estate market has shown itself to be open to new technologies, and new ways of viewing homes. Platforms to see homes and evaluate whether they are worthy purchases are one thing, but there is also likely to be a role in AI when appraising homes, negotiating, and many of the other aspects of this complex market.
There are likely to be more startups cropping up in the world of real estate, to help both buyers and sellers as well as the service industry that surrounds the marketplace. Realtors and investors will likely adopt these technologies early to try and get a market share, and the property market will continue to be huge throughout the next year (and the next decade). People always need places to live!