Interesting Real Estate Trends Growing With The Pandemic

According to an article recently published by the National Association of Realtors, the recent virtual conference organized by the Urban Land Institute has underlined several growing trends in real estate. 

Some of them started before the pandemic and are accelerating due to Covid-19. I have previously written about some of them.

• Smaller offices. The growth of remote work from home is pushing companies and office space tenants to re-negotiate their current leases or target smaller office spaces. Future work trends could include a combination of part-time work from home and part-time in-person work at the office, with a growing number of satellite offices, especially in surburbs throughout the country. In-person work will stay significant in order to nurture innovation, team spirit, training and company culture.

• Migration to the Southern States. The pandemic has fueled the desire for lower-density areas, leading to suburban growth, and the sale of many single-family homes. This trend had already started over the last few years as millennials are having families. The Southern states, such as Florida, which offer greater housing affordability and larger living spaces, are benefiting from relocation trends.

• Future urban revival. Cities such as Boston, Los Angeles, New York, San Francisco, and Washington, D.C., or Miami may struggle for the next three to five years to return to their pre-pandemic state, however they will probably reappear as major economic and social hubs because of their appeal in the entertainment, finance, technology, arts and education fileds. Some cities may add more green space as they look to add appealing outdoor activities to attract residents.

• Higher retail vacancies. As the pandemic has helped online shopping surge and retail spaces close down, the trend favors smaller retail spaces, higher vacancy rates and companies turning some of their stores into storage and distribution centers.

• Smaller local public revenues. As hotels, office buildings and shopping centers loose real estate value, cities are going to receive less property tax revenues. This may lead to less infrastructure and road improvements as well as the growth of public-private partnerships to fund public projects as a result.

• Safety and health concerns. Health and well-being will become an important factor across all real estate sectors, particularly hotels, office buildings, and restaurants. Companies will invest in new technologies that can offer cleaner and safer buildings, healthier air conditionning systems, sensors, touchless entry and exit. In the residential real estate market, touchless controls on sinks, motion sensor lights, and large windows to get more fresh air are becoming very popular.

• Affordable housing options. The pandemic has forced many people to become jobless or see their income collapse while the eviction rate of defaulting tenants will clearly soar once the national moratorium on evictions ends. This could possibly lead to zoning changes to convert empty hotels, retail and office spaces into affordable housing projects.

Photo by Francesca Tosolini for Unsplash.