What are the Future Trends in Real Estate?

Question

This is the crystal ball question that all of us wish we had the answer to: What Are the Future Trends in Real Estate?

Do you have any special insights or theories about trends in certain property types like commercial office or retail?

What types of real estate will be growing popular in coming years and why?

Or, what would you invest in if you had a ton of cash to throw at one particular type of real estate?

Don’t be afraid…..please share your opinions on future trends in real estate. Thanks!

Account Closed · Answer

I know a lot of hard money lenders are now looking at mobile home parks for lending on purchases, etc.

Dale Osborn · Answer

@Mike Hasemann as to depreciation, you still have the infrastructure available: roads, sewer lines, water lines, electric pads, any buildings. Here in WA I have an old cinder block buiding built around 1954 and county appraiser has it valued over a million dollars.

Find a local MHP in your area and look it up in your county records to see how the land & infrastructure is broken down for your area.

Al Williamson · Answer

Corey Dutton you didn't specify how many years into the future. But in my corner of Sacramento, the immediate trend is sideways. If I had plenty of money and time, I would buy up more apartments.

Warren Buffet's book "Snowball" really bolstered my courage to do my own homework and not pay too much attention to group-think. Some of the asking prices for apartments in my thiefdom are going for near replacement costs. I'm bullish and would go all in.

As unemployment rates fall, rents and RE values will trend up, people will forget about the housing bubble, and things will be good for both apts and SFHs again. Give it 4 years.

Will Barnard · Answer

Sellers state they are trending upwards.
Buyers state they are trending downwards.
Government states they are trending in whichever direction makes them look better.
NAR states they are trending whichever way you want them to so long as you use an agent in their membership.

I say, look at your past and present inventory levels in your area and compare the data. It is a supply and demand issue.

My area is trending sideways with small blips down, but then up. All in all, unless large changes occur, I will stick to what I am doing and adjust accordingly with the market changes as they occur.

Mike H. · Answer

I have a question on MHP's maybe you can answer.

Aren't you giving up a huge benefit of real estate by going with MHP's? Specifically, the lack of depreciation.

Do you get any depreciation at all for MHP's? Seems like there's a big difference between figuring out rate of returns when adding back depreciation and the tax savings with that.

Dale Osborn · Answer

If I had buckets of cash to invest - I would put it into mobile home parks. Having apartments for 10 years - we got burnt out on the high maintenance and costs between tenants.

With the number of people losing their homes - many are shell shocked and will not want to own anything ever again. They will be headed for the apartments. Some will still want some type of home ownership and these will head for the mobile home parks. People will always need a place to live. If you can handle the apartments - they would be a second choice.

Arthur Garcia · Answer

Hey Corey,

I would only add that I think one thing is for sure - taxes will increase.  As the government looks for ways to raise revenues, it is only a matter of time before they start to re-examine "perks" we investors get to take advantage of.  I'm not sure what that looks like, but I guess if I did, I'd be trying to predict bigger issues.