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8 Movements in Real Estate That Everyone Should Start Building On

You probably take it for granted that real estate is a sure investment, but that’s not exactly right. While it’s true that everyone will always need housing and office spaces, property development and construction is a capital-intensive venture that can take years to earn returns. An investor who doesn’t know what he’s doing will surely fail. Similarly, developers who don’t read and anticipate the market’s trajectory may end up losing millions in ghost projects.  Nobody can predict the future, but if you know which real estate trends to pay attention to, you’re likely to lay the right foundations.

There’s More in Store for Urban Cores

One of the boldest predictions on real estate is on the demand for homes in urban cores. Mid-sized cities across the US are starting to develop into the so-called “18-hour cities.” Cities like New York, LA, and Chicago have historically been considered as prime locations because of the vigorous city night life, but they can be prohibitively costly for businesses. Second-tier cities like Denver and Nashville have a reasonable 18 “waking hours,” and they still have room to develop. Plus, they are becoming destinations for millennials who want to enjoy urban living without the big-city expense. So if you’re looking for a location with good growth potential and low barriers for real estate development, and assuming the US economy remains on solid ground for the next decade or so, these are good places to build on.

People Are Passing on Premium Housing

Are you considering investing in high-cost housing and luxury units? You may want to reconsider, because that market may start to contract significantly. Because of increasing land costs, limited availability of labor, and fears of shallow demand in the entry-level market, the past year saw builders target their efforts towards high-price residences. This led new-home prices to spike faster than people can keep up with. The luxury segment is now saturated, and the entry-level sector is starting to look more promising. Credit access is improving and becoming attractive enough for first-time homebuyers, and that means you have to meet them where they stand. No frills, no luxuries, no bells and whistles needed.

Virtual Reality Shows Real Promise

If you’re a real estate developer, you’ll know that your business isn’t confined to building housing or commercial units. To get returns, you’ve got to convince people of a property’s potential. This can be very difficult because buyers will want to see a unit, or at least a compelling model unit, to be persuaded of its value. That can be a challenge in cases wherein the prospective buyer lives too far away or the property isn’t built yet. This challenge can be overcome through VR technology. Premium real estate firms such as Sotheby’s International Realty are revolutionizing the sales process by showing prospective buyers 360-degree scans of existing luxury homes. VR headsets give them a chance to “walk through” the space without even stepping through the front door. Other companies take their clients through fully virtual spaces, 3-D renderings of homes based on their plans and vision. While the technology is still restricted to luxury home listings, it may soon become inexpensive enough to expand to housing markets at lower price points.

Cookie-Cutter Condo Amenities (But Not All of Them)

It was not so long ago that condo developers would offer amenities like activity centers and indoor swimming pools as unique value propositions. Now, such attractions have lost their glamor, and condo buyers are looking for new features to really feel the high life. Condo developers have to throw unique fixtures into the mix, like outdoor theater spaces. However, that doesn’t mean all standard condo amenities are not worth investing in. For example, fitness is a timeless concern for everyone, whether you want to look good , lose weight or stay healthy, so jogging paths and fitness centers are still considered as non-negotiable facilities.

Planting the Seeds for Green Living

With the debate on climate change practically settled, developers are taking the market potential of green construction in real estate very seriously. Commercial builders are starting to aim for LEED certification even if it’s not required, and the residential sector is following suit. The rationale behind energy-smart homes is now accepted as common sense: the more you save energy, the less carbon footprint you have (and the less you have to spend on electricity). To satisfy this need, more condo developers are starting to incorporate green condo living and energy-efficient technologies into their housing designs. Location is also becoming more important than ever, as millennials who want to reduce their carbon footprint are looking for living situations that would allow them to walk or take public transportation to work rather than drive their own vehicles.  

Discover Sustainable and Low-Cost Innovations

To tackle the challenges of eco-friendly building and low-cost design, builders have to adopt innovative solutions. New technology and materials will be critical on this front. For example, resilient and sustainable homes, which will be able to weather the effects of climate change and minimize resource and capital expense due to repairs, are becoming more in demand. Water-saving fixtures and rainwater-harvesting systems should also be considered, as well as the use of reclaimed wood floor panels. Novel glass manufacturing techniques may also allow the creation of recycled glass fixtures with LED lighting built in. Materials such as stone or thin terracotta veneers (as opposed to solid stone and genuine terracotta) also allow fixer-upper home redesigns, making luxury less expensive.   

Nature: the New Normal?

With more people getting on the green bandwagon, developers and investors have to consider different green trends in real estate. For instance, there’s a considerable rise in urban agriculture—rooftop gardens, urban farms, and vertical farms—so condo developers should consider integrating that in their community designs. More homeowners are also seeking better integration of indoors and outdoors, shifting from architecture where the outside view is blocked to an aesthetic where nature is on full display through large-size glass doors and windows. Like in the Philippines there are establishment that incorporates Lumivent Technology, example are DMCI condominiums, that allows their tenants to enjoy natural sunshine and air circulation and therefore rely less on artificial lighting and climate control.

Can Thinking Smaller Pay Off Big?

Another way for people to reduce their carbon footprint is to reduce their living space. This is a great option that will also benefit those who are still reeling from the ripples of the financial crisis or burdened by student debts and are unable to afford traditional-size residences. Some people have chosen to live an economical and eco-friendly lifestyle by living in so-called “tiny houses.” However, that idea still faces significant challenges, so it hasn’t gained enough traction to compete with more traditional housing options. Still, it may provide an important cue for future real estate construction projects: you may be able to tap into a young market by concentrating on small but comfortable homes where space isn’t maximized, but rather optimized.

The property development landscape is constantly shifting. While the mantra of “location, location, location” still holds true, people’s changing lifestyle preferences and attitudes will influence their residential choices.  Looking into a few trends and developments can give you a head start over the competition, but any choice entails some risks. At the end of the day, you can’t accurately guess what the future of real estate holds. The closest you can get to doing that is to build it yourself.