The real estate industry will be facing several challenges in the upcoming year. Affordable housing and keeping up with the latest technology are just a few of the areas that realtors will find challenging. The following are seven specific areas that the real estate industry will need to find solutions for in 2020.
1. Affordable Housing
This is probably the number one issue facing the real estate industry in 2020. Millennials are increasingly finding it difficult to find affordable housing near their places of employment. The situation is especially critical in west coast cities such as Seattle and San Francisco. With millions of individuals under 40 struggling with student loan debt and rising healthcare costs, even modestly priced real estate can be difficult to afford.
According to CNBC, the housing shortage could become the worst ever in the history of the United States. There will likely be increasing demand, yet a tight supply of what is considered “reasonably” priced housing options. Real estate professionals will need to find solutions to the problem of increasingly out of reach housing for millions of Americans.
2. Competition from Nontraditional Markets
Traditional real estate agents will continue to face stiff competition from nontraditional sources. These sources include options such as fee-for-service brokers and virtual realtors. While most brick and mortar real estate agents will almost certainly have developed an online presence and implemented new technology, it’s still not the same as a company that completely operates online.
Realtors that still operate from an actual building will face increased competition from companies conducting business completely online. Some of the basics will still apply, however. Providing excellent service and being available to your customers will always help a business succeed. Providing local expertise is another way that agents can meet the challenge of competing with virtual realtors.
Climate related issues are becoming more of a problem for potential homeowners. Everything from fires to hurricanes and flooding are affecting real estate. Whether to build in certain areas as well as keeping building up to code are all important issues facing both home buyers and real estate professionals. Forbes states that climate risks and weather related issues are already a major factor for the real estate industry.
Insuring property and buildings is another problematic issue related to weather challenges. The real estate industry will need to work with insurance companies to find solutions for building and maintaining structures throughout the country that can stand up to hurricanes and earthquakes. They may also need to work with customers when purchasing a property to make sure they are able to get the insurance they need.
4. Providing Senior Housing
As Baby Boomers continue to age the trend to downsize or move to senior living centers will likely increase. As the graying of America continues, those working in real estate will see several challenges related to these changes. For starters, many Baby Boomers will likely want to sell their homes.
This could prove difficult since many younger individuals will be struggling to buy them. They older generation will need a variety of senior living options that meet their needs. This could range from assisted living solutions to senior communities that provide plenty of amenities. Market Watch points out that many older adults want senior living that provides an extensive community. This could include everything from on-site gyms and theaters to gardens and art galleries.
5. Keeping up With Home Staging Trends
Home staging has always been a big part of preparing for a home sale and receiving the best offer possible. Most realtors understand that a seller, and ultimately the agent, will make more on a home if it is staged properly. Decluttering has always been the old standby when it comes to one of the best ways to make a home look appealing.
There are, however, other methods that realtors will need to learn in order to make the most of each home sale. Making sure a home appears “environmentally friendly” is extremely important. This can be done by featuring furniture with natural textures or displaying real plants. Other home staging trends include walls that are soft shades of blue instead of the classic beige.
6. Crumbling Infrastructure
Many experts see this as one of the most challenging problems facing real estate. According to APEX Commercial Group, everything from bridges and roads to mass transit are in dire need of repair and upgrade. Infrastructure needs can affect where companies want to build or relocate, which ultimately affects the real estate industry.
When businesses decide not to come to a certain area, this means private home buyers won’t be coming along either. Crumbling infrastructure can also affect the homeowners that already live in certain areas. Potential homeowners often make decisions regarding where to buy that are dependent on access to particular highways and dependable transportation in the area.
7. Keeping Up With Technology
Finally, the real estate industry will need to face the challenges of keeping up with advancing technology. This will include smart technology in the homes and apartments that home buyers will be looking for as well as technology in the real estate industry itself. New technology in real estate includes iBuyers that directly bypass agents when purchasing a home from the seller.
Video marketing and virtual tours have been around for quite some time, but will almost certainly continue to evolve and require realtors to keep up with this technology. Many potential buyers may want to be able to completely view an entire home online before making an actual visit. If a real estate company doesn’t keep up with the latest technology they could potentially lose a significant number of sales.
The upcoming year will bring many changes and challenges to the real estate industry. The future belongs to the realtors who can adapt to the many changes 2020 will bring while still providing old-fashioned good service for their clients.