Emerging technologies and changing homebuyer demographics have recently disrupted the real estate industry. These changes have impacted everything from how properties are listed to average closing timelines.

Investors need to stay abreast of these trends as the industry shifts. Here are some key things to watch for:

Sustainability

As the world’s concerns about climate change, biodiversity loss, and pollution continue to rise, sustainability is changing the face of real estate. As a result, companies that implement sustainable policies and practices have a leg-up in the marketplace.

In its most fundamental sense, real estate consists of land and everything permanently attached to it, such as buildings or natural resources like minerals or water. It also includes commercial and industrial properties.

Both newly constructed and resold residences are considered residential real estate. These include single-family homes, condominiums, townhouses, duplexes, and vacation homes. Commercial real estate includes places of business such as shopping centers and strip malls, hospitals, hotels, and office buildings. It can also include apartment buildings that are rented out for business use.

Investing in real estate is complex and requires a thorough understanding of market trends. That’s where real estate agents and brokers like Loretta Maimone come in. They analyze data on comparable homes and properties, advise clients on property enhancements, and negotiate to ensure the best deal for their clients.

Millennials

Millennials are changing the face of real estate. Their unique preferences, values, and lifestyle choices influence their buying decisions.

For instance, they are drawn to urban areas with vibrant social scenes and various job opportunities. They also prioritize sustainability and eco-friendly features in their homes. This generation is different from their baby boomer parents in that they are delaying traditional milestones, such as marriage and starting families. Consequently, they have delayed homeownership for many years.

Nevertheless, they are ready to buy when they can afford it. Moreover, they may be the key to overcoming record-setting inventory shortages. As a result, their home purchase activity may provide a floor for the market. Interestingly, high-end markets have seen less dramatic decreases in inventory than other markets. This is because they are attracting tech-savvy millennials who value sustainability. Moreover, these buyers will pay premium prices for greener, sustainable homes.

Technology

The real estate industry needs to catch up in its use of modern technology. However, new developments in technology are starting to change that.

For example, artificial intelligence is transforming the way properties are managed. It helps automate paperwork and analyze property data. This allows real estate managers to make better property management and maintenance decisions. It also saves them time and money.

Another tech trend affecting the real estate industry is blockchain. This technology makes it easier to track property transactions and reduces the likelihood of fraud. It can also create smart contracts that facilitate property sales without an intermediary.

Other technology trends that are changing the face of real estate include augmented reality and virtual reality. These technologies allow potential buyers and tenants to view a property remotely. They can even walk around a property independently without meeting with a realtor.

Energy efficiency

As energy efficiency becomes a core component of real estate portfolios, investors seek ways to leverage its potential to reduce risks and increase returns. In addition to cost savings, energy efficiency also offers a wide range of competitive advantages.

For example, a commercial property with ENERGY STAR or LEED certifications may command higher lease and sales prices. This is due to a combination of factors, including lower utility costs and improved marketability. As a result, investors can achieve attractive financial returns and contribute to a more sustainable future.

However, achieving this goal requires a high level of understanding and prioritization. This means identifying physical and transition risks. These risks include the volatility of energy and water prices, regulatory changes, and shifting to a low-carbon economy. Managing these risks will be essential to ensuring the success of future real estate projects. Real estate players must develop robust climate intelligence capabilities and identify the most impactful options for transforming their assets.