8 Massive, Unstoppable Trends Disrupting Real Estate Forever

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Want to know how to benefit from these trends? Head down to the "How do I benefit from this section"

1) Built-to-rent communities are poised to be the hottest investments in the next decade

COVID-19 has officially reversed the decade long movement of people to urbanized areas. People are now doing the exact opposite. They are moving back to the suburbs. As suburbs come back in fashion, so does the demand for single family housing, but with a twist. As more people choose to rent instead of buying a house, they are now seeking the benefits of a single family residence with the amenities of an apartment community. They want a bigger backyard and more space but also desire a pool, play areas and dog parks. Built to rent single family communities stand at the center stage of best of both worlds. 

2) Transformation of retail

With COVID changing consumer habits forcing people to stay at home, e-commerce grew by nearly 60% in 2020. However, retail is not set to go away completely. As we go through this transformation, retail is not set to die completely. People still shop in stores and retail will not only survive but thrive after a few painful adjustments. As e-commerce booms and they grab a larger share of the market sales, more and more larger malls will being converted into distribution centers and self storage facilities. Along with that, we will also see return of smaller neighborhood markets and residential shopping areas with mix use of space for living, restaurants and retail sector. The primary driver for this will be the resilient nature of such facilities. The residential areas provide a recession proof investment while driving business for small local businesses which will be easily accessible to the people For example, checkout projects in north Austin in the resources section (2) 

3) Staycations are back in fashion, causing a boom in short term rentals demand.

With increased flexibility from freedom to work from anywhere, extended trips will become the norm. Along with that, the pandemic also made people fall back in love with staycations which we think will drive the demand for short term rentals. The increase in home prices will prevent new inventory from getting on the market due to diminishing returns. As a result, the supply will not be able to keep up with the demand. Checkout the data from AirDNA(3) in resources section. It shows that available listings may not recover to 2019 levels until as late as 2023.

4) Mass exodus of people from some cities will continue 

This ties partly into the first point. As mass exodus of people will continue from cities, most single family residences in suburbs will continue to rise in value. The biggest beneficiaries of this trend are the rougher neighborhoods closer to the city. With high home prices pricing people out of the established neighborhoods, people will move to the less attractive parts of the town leading to rapid gentrification. 

5) 15 minute cities are going to bring about a new kind of urban transformation

These cities will lay emphasis on creating new kind of cities where most amenities are accessible to people within a 15 minute distance. This will change the way people think about urban living. This trend will especially be more prominent in cities like Portland, NYC, Austin and Seattle due to the political scenario. For example, checkout the link to one such projects in the resources section(5). 

6) Big data analytics will transform the infrastructure

With big data assisted tools like dealCheck, AirDNA and Enodo, real estate underwriting, lending and market analysis will be transformed by making the data far more accessible to people. With subscriptions running as low as $50 per month, the information about future trends and how to profit from them will no longer be limited in the hands of those with bigger pockets (pun intended). In our opinion, this trend will create a set of winners and losers, just like the pandemic did for a lot of industries. Those who jump on the digital bandwagon will benefit significantly whereas the reluctant ones will have to suffer. Checkout links for these in the resources section (6)

7) Augmented Reality will transform the purchasing process

Augmented reality doesn't just mean requirement to wear bulky, cumbersome equipment on your face with limited functionality. Augmented reality also includes anything that overlays a digital layer on top of the real world. Guess what, your snapchat filters are Augmented reality too! With increasing computing power of the smart phones and tablets combined with incredible new technology like the Apple glass, technology could redefine the way we purchase homes. Virtual staging and virtual home tours from the comfort of your home could become the norm, reducing the need for in person showing through agents. As more people become comfortable with online home purchases, the number of real estate agents could reduce. The ones that do survive, will be able to provide far more services with the time consuming aspect of in person showing automated. Checkout links the source section (7) 

8) Bitcoin's technology applied to real estate could make real estate the next stock market

While explanation is of the underlying principles is beyond the scope of this article, the fundamental concepts behind backing this transformation will be blockchain, smart contracts and tokenization. Although currently limited by government policies, companies like RealBlocks, propy and BrickBlocks, with the ongoing efforts to ease securities laws for real estate, could make real estate investing accessible to everyone, just like Robinhood made stock market investing accessible to everyone. Checkout links in the resources section below (8)

How to benefit from each of these trends

Since the first 2 trends are focused on large scale projects where only option is to invest with companies doing these deals, we will start with the third point to see how rest of us can benefit from these trends

3) Purchase short term rentals in your local market or learn how to get your own Airbnb listing without owning a property. 

4) Look around in neighborhoods that you previously thought had no hope. You may end up with a gold mine of fix and flips.

5) Look at trends 15 minute neighborhood/city planning by large metros and strategically place your investments closer to these areas. These may require more patience but done right, the returns could be stellar

6, 7 and 8) I had to combine these since not much is known about these technologies and policies surrounding them at the moment. That being said, we think these are poised to be the game changers in real estate in the next decade. Keep an eye out and stay up to date on the latest tech news. Now might be a good time to renew your TechCrunch subscription. 

Resources

1) https://www.forbes.com/sites/forbesrealestatecouncil/2021/02/26/build-to-rent-btr-detached-housing-and-the-future-of-multifamily/?sh=73b5224414d1

2) https://www.texasnationaltitle...

3) https://www.airdna.co/blog/202...

4)

5) https://www.15minutecity.com/a...https://www.portlandonline.com...

6) https://www.enodoinc.com/https://dealcheck.io/https://www.airdna.co/

7) https://www.tomsguide.com/news...https://better.com/content/mos...

8) https://www.realblocks.com/abo...https://www.brickblock.io/https://propy.com/browse/

I am very interested in the tokenization of real property concept. There would potentially be no need of a title search anymore and conveyance of property tokens could literally happen in an instant on which ever Blockchain supported all legal real estate transactions. Title companies and attorneys would probably disappear from the real estate transaction. Very interesting

Great list.  I will add one:

9) The affordable housing shortage may never be solved in my lifetime.  They can't build it, and more gets repositioned every year exacerbating the shortage.  You won't be able to find rental units for less than $1,000 rent per month in safe locations in most growing cities...buy it now!

Originally posted by @Mike Dymski :

Great list.  I will add one:

9) The affordable housing shortage may never be solved in my lifetime.  They can't build it, and more gets repositioned every year exacerbating the shortage.  You won't be able to find rental units for less than $1,000 rent per month in safe locations in most growing cities...buy it now!

 Agreed! It will be interesting to see how or if we can ever solve it. With more material used to build luxury and upscale housing it gets more and more difficult to profit from building affordable housing due to rising material costs. I think companies like Boxable have a chance to solve this by bringing a new kind of housing. 

Thanks for compiling the list. I found them very interesting especially point no 6 where you rightly mention, "Those who jump on the digital bandwagon will benefit significantly whereas the reluctant ones will have to suffer". 

I've been spotting some trends myself just by reviewing already available data points and have found that data does not lie but it may not tell the story you think it does. 

Originally posted by @Mike Dymski :

Great list.  I will add one:

9) The affordable housing shortage may never be solved in my lifetime.  They can't build it, and more gets repositioned every year exacerbating the shortage.  You won't be able to find rental units for less than $1,000 rent per month in safe locations in most growing cities...buy it now!

I dont see affordable housing coming back to the private sector other than in some very specific locations around the US were you can still buy land produce a SFR and sell it for 200 to 225k and make a profit.. the rest of the US govmit is going to have to back these with tax credit plays is my thought.

Originally posted by @Don Konipol :

@Rishit Shah

Maybe….or maybe not

Seems like all “obvious” trends don’t pan out, and things we never thought of do occur.

also the majority of real estate is bought sold etc by folks with little to no experience and they will just keep transacting the way its always been done.