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Real estate trends in the U.S.
By Lea-Ann Fowler
COVID-19 and the uncertainty in the U.S. has created a sense of instability. In the ongoing search for safe investments, there continues to be a shortage of deals with good yields and those that are available are being chased by an increasing number of investors. The following trends provide a snapshot of trends across the U.S.
Multi-family and affordable housing
Housing is a bigger issue now than it has been in decades. With rents and home prices skyrocketing, there is a severe shortage of affordable and workforce housing. Overall, multi-family housing is still leading the nation’s transaction platform, powering 90% of all online commercial real estate sales today.
Community oriented developments
Collaborative consumption, integrated platforms of products, services and experiences is increasingly popular with younger generations who prefer social interaction, sustainability and community oriented developments. Green or energy efficient developments are leading the trend, especially projects aimed at clean transportation, sustainable water management, energy standards and the cultivation of environmentally friendly technologies.
Senior housing
As life expectancy has risen the percentage of Americans over 80 will double, from 6 million to 12 million in the next two decades. This means that a huge flood of seniors will be looking for a variety of housing options, and not just a place to live, but a community that provides an active post-retirement lifestyle.
Technology
Technology in the real estate sector will have more impact on the future of real estate development than any other factor. With new means to analyze and act on property data, and new tools to digitize the property selling process, one of the biggest areas of attention is the multifamily and office sectors. In these sectors, companies are developing new products to simplify management and operations including amenity focused services for residents and office users, such as package delivery and digital concierge.
Infrastructure
The lack of federal action to improve infrastructure has led to some U.S. cities levying taxes to help build and expand their own transit systems. Considering the potential of transit-oriented development, these types of local investments will help create important and lucrative real estate development opportunities.
Opportunity Zones
The Opportunity Zone program is an investment regime introduced in 2017 that is designed to spur investment in economically distressed areas within the U.S. by providing tax incentives. These incentives allow investors to defer payment of capital gains tax if they put those gains into an opportunity zone. The benefits are two-fold: (i) capital gains payments can be deferred for 10 years if gains are put in an opportunity zone project and the investor holds the position for 10 years; and (ii) gains on the opportunity zone investment itself are also tax-free if the investment is held for 10 years.
