Knowing current trends is essential for the successful real estate investment professional. Equally important is to look ahead to future forecasts and probabilities. Being aware of what potential changes are ahead over the next ten to thirty years can influence the decisions you make today.
Driven by Demographics and Technology
Change is inevitable. Change is unpredictable. Despite these two truths, there are some predictive signs that the real estate investment professional can rely on to drive change. One factor is demographics, the other technology.
Boomers Bring Change
There is no denying that this ‘baby boomer’ generation is defined by change, if not turbulence. With unprecedented buying power and health, they’re a generation apart that will continue to drive further change as they age. It’s not surprising that they’ve had considerable influence in the real estate market and will continue to do so.
The speed of change is mind-boggling when it comes to technology. In the past five years alone, mobile technologies and the social media explosion have changed the face of business. While it’s slower to integrate into the property end of the real estate market, it certainly permeates the whole of the industry. While it’s impossible to predict the trajectory of technological advances, it’s imperative to remember that form continues to follow function.
Changes in Housing, Health Care and Retail
One near term change on the horizon is the impending wave of retiring baby-boomers. The generation of change will certainly be changing the entire real estate market from the housing sector, with a higher expected demand for multi-family housing to commercial real estate, with expected changes in everything from health care facilities to retail. Smart real estate investment professionals will be projecting for the demographic change.
Smaller Gadgets – Smaller On Site Staff – Smaller Office Spaces
The impact of technology is already having an effect, and is likely to continue altering the real estate landscape. For example, an increased number of remote employees is already reducing the need for office space. Some projections forecast reductions of 40% less space being required over the next 15 years.
Retail space requirements are also looking at technology-driven changes. Increased online sales are already driving some retailers to rethink their physical spaces. There is some speculation that there will be an increased need for warehouse space as retail spaces shrink.
Clearly change is always happening, and it’s often as predictable as it is unpredictable. Until it happens, it’s just conjecture and opinions, but those count too. What are your thoughts on societal trends that may have an impact on your business as a real estate investment professional?
