As the COVID-19 pandemic continues longer than any of us may have predicted, the real estate landscape continues to shift. Some housing trends increase in prominence and some come to a grinding halt, all while new, emerging opportunities for growth present themselves. One door opens as others close, so to speak. For example, the millennial-led migration from cities to suburbs has only gained momentum. Conversely, multifamily developers and managers have shifted strategies to attract new residents by promoting health and wellness movements rather than property amenities.
“Times of great change always present significant opportunities,” said Urban Land Institute (ULI) Global CEO W. Ed Walter during the recent ULI virtual fall conference. “In the near term, our suburbs will benefit from new growth spurred by shifting demographics and changes to living and working patterns resulting from the COVID-19 crisis.”
Earlier this month ULI published its Emerging Trends in Real Estate 2021 report, referencing insight from over 1,500 leaders in the real estate industry. Some of the following trends are on the rise during the COVID-19 pandemic:
- Smaller office footprints
- Online meeting services such as Zoom and GoToMeeting have made working from home (WFH) easier and more efficient than ever. Businesses are realizing they can cut costs by reducing their office footprint with employees working remotely. According to the report, over 90 percent of real estate professionals expect companies to adopt at least a part-time WFH policy.
- Suburban migration
- As previously mentioned, suburban migration, especially among Millennials, was a popular trend before the pandemic. Now, the desire for low-density living is higher than ever. As a result, the south has seen a large influx of growth from movers longing for the greater housing affordability the region has to offer.
- Retail vacancy
- Over 80 percent of ULI survey respondents believe the pandemic has only accelerated a shift in the retail sector that was already emerging due to online competition. For example, large department stores like Macy’s experienced disastrous sales in March after closing stores for almost two weeks and reportedly losing the “majority” of its sales.
- State/local fiscal issues
- The loss of revenue across the board is expected to cause a wake of fiscal challenges for state and local communities over the next few years. Real taxes, the main source of revenue for local governments, will likely fall due to a drop as hotels and retail centers lose value. Furthermore, pandemic concerns create a snowball effect by encouraging consumers to shop online even more while actively avoiding spending money in-person at retail stores, restaurants, or other local businesses.
- Safety and sanitation concerns
- If anything positive has resulted from COVID-19 it is health, safety, and sanitation practices. Businesses around the world are (re)enforcing sanitation practices by requiring customers to wear facemasks, providing free hand sanitizer at common contact locations in-store, limiting maximum occupancy, and implementing social distancing efforts where a line or queue may form.
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