There isn't an industry, zip code, or person in this world who hasn't been impacted by the COVID-19 pandemic. It's been a global whirlwind of epic proportions - physically, emotionally, and financially. And at the heart of the real estate market, you'll find each of these variables converging together, which has given way to a set of circumstances that are unlike anything we've ever experienced. The question is, what impact will COVID have on the real estate market as we move forward?
5 Trends and Developments to Keep an Eye On
The impact of the pandemic on rental property investments has been sudden and significant. And while circumstances are changing rapidly, it's important to keep an eye on the direction things are moving. Here are a few trends and developments to be aware of:
1. Apartments Will Look Different
The entire world of apartment housing is about to change as we know it. The longer the pandemic goes on, the more likely it is that new apartment design and construction will take on a new look and feel. According to real estate consultant John Burns, you can expect to see several new trends. This includes more outdoor spaces that are strategically optimized to encourage social distancing.
"We advise more 'under roof' spaces without walls that provide shade and fresh air," Burns explains. "Apartment communities will need more places for outdoor yoga and parks for free play or alfresco dining. Today's consumers love their pets more than ever, and community amenities that include dog parks or pet-washing stations will resonate more than ever before.
Inside apartment communities, we'll see smarter delivery services that encourage safer delivery of goods. There will be more natural light and better air quality systems. We'll also see the rise of more apartment-style "home offices." This may look like flex bedrooms that can easily convert from sleeping quarters into work quarters.
2. Virtual Will be the New Standard
Virtual apartment tours and rental property viewings will likely become the standard moving forward. It's more efficient for everyone, including both the renter and the owner/manager. New technology will likely emerge in this space to create a better user experience for all.
3. Property Management Will Evolve
Look for high-quality property management services to become even more in-demand than they already are. Landlords and investors no longer want to be on the "frontlines," so to speak. They'd rather outsource all client interaction and management and focus on the investing side of things. This will pave the way for major growth in the property management industry.
4. Flexibility Decentralizes Urban Areas
It used to be that, in order to work for a company located in Manhattan, you had to live in New York City. Or to work for a startup in Silicon Valley, you had to live in San Francisco. But with the rise of virtual working, this is no longer true. You can "work" in New York City or San Francisco and live in North Dakota.
This increased flexibility is allowing people to move away from expensive, congested markets and call anywhere home. This includes less expensive and more rural markets. This will ultimately lead to a wider population spread and (hopefully) create more opportunities for affordable housing.
5. Demand for Affordable Housing Rises
Speaking of affordable housing, the demand for less expensive housing is rising. In high-priced markets, like Manhattan or San Francisco, shifts could be coming. Most notably, there will be a rise in the supply of more affordable units.
"In these markets, the supply of affordable housing is constricted and the pressure is on to offer less expensive options, especially as we move forward and the need to accommodate for a remote workforce becomes more of a reality," ApartmentGuide.com notes. "As far as the trickle down to middle America, it's early to say, but it's possible."
This will be an intriguing storyline to monitor over the next couple of years. And whichever direction the market goes, one thing is for sure: It'll never be the same as it was pre-2020.
What Does the Future Hold?
The reality of real estate - or any market for that matter - is that it's impossible to predict what the future holds. The good news is that we're gaining more data the longer the pandemic continues, which will allow savvy industry professionals to make more educated decisions.