Happy December! Here at Rental Beast, we’re saying “goodbye” to sweater weather and “hello” to holiday cheer, snow, and preparing to ring in the new year! Of course, we want to make sure that real estate agents come in 2020 feeling prepared and knowledgable about real estate trends! To sure up success for real estate agents in 2020, we’ve been doing a lot of reflecting on recent real estate trends and predicting what developments in the real estate market will play a big role in 2020. Take a look at some trends we’ve been tracking during 2019 to get perfect vision on the 2020 market.
1. The rise of tech is unstoppable, but keep an eye on iBuyers and AI
The ever-changing field of high-tech is constantly effecting the way real estate agents do business, and we’ve always had to grapple to keep up with evolving tech driving our industry. High-tech can help. Like, for example, we hope that Rental Beast’s SaaS platform helps streamline the whole rental process for you. But, sometimes tech can be a bit scary, especially if you weren’t born speaking fluent hashtag (If you want to brush up your social media game a little, check out our collection of articles about social media!:
But, in particular, Artificial Intelligence has made massive leaps in 2019 and the advent of iBuyers gave many agents some serious existential dread. We’re anticipating that in 2020, we’ll see the rise of virtual showings, and expanded abilities to stage chic apartments using the power of Artificial Intelligence. We’ll have to hang tight to see how iBuyers will shake out. But, to agents facing a bit of existential dread, remember– agents don’t just buy and sell homes, they offer irreplaceable support and a personal touch. Business is personal; we don’t think real estate agents are going extinct anytime soon.
2. Sharing is caring!
While WeWork might have fizzled, their ethos is shared by many. Communal spaces are becoming increasingly popular. Think: urban food halls, ride sharing apps, and luxury apartment buildings with common areas where residents can unwind together. Many millennials might want to live, work, and eat in gorgeous community spaces that allow them to easily interact, share ideas, and make friends. However, many are also wary of commitment, especially when it comes to dishing out lots of money on a real estate transaction. Sharing spaces is a low-commitment, high-level-of-choice way to appeal to millennial tastes.
What does this mean for the real estate market? Maybe this communal desire is one of the important reasons why rental occupancy has remained so strong.
3. Suburban sprawl
Cities all across the US are facing affordability crises. In Miami, 6/10 adults spend more than the recommended 30% of monthly income on their rent; California is introducing rent control in 2020 to curb astronomical housing costs. How will urbanites deal with the increasingly expensive rents and sky-high price of living in cities? One solution is to move outside of city limits. While the suburbs were, once, seemingly reserved for boomers to dish out big bucks on sprawling homes, millennials are increasingly opting to live outside city limits and move to the ‘burbs to check off more items on their wishlist without compromising on size or budget.
However, many millennials are also still renting. Renting allows flexibility of movement, and still remains an affordable choice, even for those making a higher income. This combination has resulted in an influx of new suburban rental units. And, with more space for building in the suburbs, rental communities in the suburbs can come equipped with large backyards for children.
4. Conscious spending and conscious living
With our climate at a crisis point, more real estate agents are thinking critically about how they can have their businesses develop and adapt to be sustainable, durable, and leave a minimal carbon footprint.
When thinking about how to spend their money, both members of the Millennial generation and member of Generation Z rank social consciousness as an important factor. Leaders from all industries are taking note of this important change. From biodegradable packaging to sustainable fabrics to dedications to insource all labor to the US and pay each worker a living wage, companies are putting social good first and pledging to clean up their act. The real estate industry is no different. In a recent NAR survey, roughly two-thirds of REALTORS® said buyers or sellers they’ve worked with have expressed an interest in sustainability.
Real estate agents should get used to working with clients who prioritize sustainability–Whether this means buying a smart home with solar panels, or opting to rent for a few more years.
5. Rental Occupancy remains at an all-time high
Rental occupancy is at an all time high. In Q3 of 2019, occupancy reached a whopping 96.3%, up from the prior year’s 95.9%, and close to the all-time high of 96.4% reached in late 2000. And, with both new construction is on the rise and rent control laws being issued across the United States, we’re primed to see 2020, as another year of super high rental occupancy. Think about how you can incorporate rentals into your business!
6. High income renters = Luxury Homes
Studies have shown Class A apartments available nationwide have risen from 3.9 million to 5 million, while the supply of Class B and C apartments have remained at 5.7 million. This number is higher than luxury apartment buildings, but is remaining stagnant. Luxury apartment buildings are great, and will clearly make the demand of high-income renters.
However, not all renters are high income. Many renters say that they rent apartments as opposed to buying homes because of their inability to afford the down payment for a house, or keep up with the high costs of home maintenance. Recent rent control in California will go into effect in early 2020. Where will all of those struggling to afford rent go? There’s clearly a need for affordable housing to be built.
As with many real estate trends, we have more questions than answers. However, these are seven real estate trends for 2020 that we’re keeping on our radar. One thing that is clear from these real estate trends for 2020 is the enduring popularity of multi-family units. Get ready to capture your share of the 12$ Billion available in leasing commission by working with rentals. To learn more about the Rental Beast platform or to request a no-obligation demo visit Rental Beast for Real Estate Agents.