Expanding rental market
Mortgage rates are over 7%, the highest they’ve been in more than 20 years. So it’s no surprise that mortgage application volume is at the lowest it’s been in decades, while the number of renters grows. Business is booming for property managers, bolstered by the surging popularity of build-to-rent communities.
Repurposing office buildings
Demand is dwindling for office space, but multi-family housing may see a lift. McKinsey suggests there will be 13% less demand for office space by 2030. Business Insider reports that more than 2,000 vacant U.S. office buildings could be converted into up to 400,000 apartments to accommodate a burgeoning number of renters.
Suburban retail holds strong
Despite the popularity of e-commerce, retail vacancy rates are stabilizing, especially in suburban markets. Retail spaces are shrinking overall as stores move towards smaller-format concepts. Grocery-anchored properties remain a source of stability in a shifting sector.
2024 real estate forecast: Technology plays a role The real estate industry has been on a wild ride in recent years. From climbing mortgage rates and elevated home prices to increased office vacancies and mixed growth in the commercial sector, fluctuating market conditions require real estate businesses to remain flexible.
Many real estate businesses are coping with market shifts by creating efficiencies with technology. For example, brokerages are using virtual reality (VR) to produce property tours to reduce the need for in-person showings. Some companies are automating processes and creating digital workflows so remote and distributed teams can collaborate more effectively across locations.
Artificial intelligence (AI)-powered analytics have enabled real estate businesses to make the most out of data. Investors can now identify new opportunities based on market trends and historical data. Moreover, machine learning algorithms can process large data sets to deliver more accurate property valuations.
In 2024, real estate companies will prioritize digitization of all functions to better withstand industry changes. By leveraging tech tools that provide data analytics and new real-time payment platforms, property management teams will be able to make more informed decisions to support organizational growth amidst a turbulent macro environment.
To learn more about the 2024 real estate forecast, download AvidXchange’s free ebook, “The Top 5 Real Estate Trends for 2024.”