The development of new technologies is causing widespread upheaval in the real estate industry. For instance, by streamlining the booking process, Airbnb is making it more straightforward for tenants to stay in other people's homes without dealing with an agent. We Work provides a platform for individuals to share office space. The rise of rental websites such as CasaOne and Zeus is significantly changing how individuals rent and buy houses. The real estate market is undergoing fast change due to the digital revolution's impact.
It is anticipated that the housing market will continue its upward trend. However, certain localities are forecasted to be more severely affected than others. The most severe effects will be felt in large cities with high housing costs. In addition, there is a continuing trend of individuals moving out of large metropolitan centers and towards suburban and smaller urban areas. Therefore, to be successful as a real estate investor, you need to know the geographic regions with the highest population growth rates.
In recent years, the office sector has been plagued by instability and uncertainty; nevertheless, by 2021, it is anticipated that the industry will show indications of improvement. It is expected that the utilization rates of office buildings will increase; however, hybrid work patterns will begin to dominate the workplace, resulting in a 10%–15% decrease in total demand. In addition, the fundamentals of the hotel and retail property markets have started to improve. Class A malls and hotels focusing on leisure are the most significant improvement. Despite this, yield compression continues to be far more severe than in other industries.
Assuming that the economy's expansion will continue, there is a reason for optimism regarding the market for commercial real estate. However, the sector is feeling the effects of rising borrowing rates as well as a severe shortage of residential homes. As a result, rents are expected to continue to grow at a rapid pace over the next two years due to a lack of affordable homes. Because of this, it is anticipated that the yearly increase in rent for apartments will be 10%.
The real estate industry is already experiencing the disruptive effects of technology. Astute property owners are already using Internet of Things sensors. So what may enhance the client's total satisfaction by collecting and analyzing more data? Around 49 percent of savvy property owners already share their data with their renters. This makes it easier for renters to discover the amenities they need, enhancing the experience for customers as a whole.
In addition, millennials are turning away from conventional real estate agents in favor of using the internet to locate the home of their dreams. They desire high-tech houses that have all the benefits of today. Additionally, 73% of purchasers will research their purchases using their mobile devices. In addition, most Millennials would email their real estate agents and then call them to discuss their needs.
Commercial real estate owners should reevaluate their marketing efforts regularly as technological advancements are made. However, astute real estate investors should not overlook the need to look at other parts of their property, even if they concentrate on giving renters appealing facilities. For instance, a parking lot or a gym is not sufficient to bring in renters on their own.
Various factors point to a scenario in which the commercial real estate sector would have moderate growth in the years to come. Atlanta, Phoenix, and Charlotte are three of the most promising markets for future expansion. The migration of populations and changing consumer demand are primary contributors to this phenomenon. In addition, the performance of the multifamily sector in the United States in 2021 remained superior to that of the single-family segment. By the end of the third quarter of 2021, the total amount of money invested in the sector had reached $179 billion.