Some of our recent articles have highlighted some of the recent shifts in the real estate market. In particular, we have discussed certain features that home buyers are focusing more attention on. In today’s article, we will discuss some of the overall emerging trends currently taking place due to the pandemic.
- Smaller or virtual offices: According to a recent ULI survey, 94% of real estate professionals say they expect companies to adopt a policy allowing employees to work remotely. This will likely lead to smaller offices or potentially an elimination of the need for a brick and mortar office, in some cases. It is likely to see a shift to virtual offices for many companies.
- Migration to the South: Affectionately termed “The Great American Move”, we have seen an exodus of people moving out of the cities and to the suburbs. In particular, many are moving to more tax friendly states that also offer climates conducive to social distancing. In addition, home prices in Florida are also favorable compared to many northern states.
- Retail & commercial vacancies: As mentioned above, with more people working remotely, this is decreasing the demand for commercial real estate. In addition, more people are also switching to online shopping in efforts to limit their potential exposure to the virus. This is greatly impacting retail space, thus leading to a glut of inventory.
- State & local fiscal issues: Cities large and small could face major fiscal challenges over the next few years. Real estate taxes, which usually comprise the largest source of local government revenue, will likely fall as hotels and shopping centers lose value. The loss in revenue could have a lasting impact on government services and infrastructure investments. It appears as though a majority of cities will be delaying or canceling infrastructure projects due to the COVID-19 pandemic.
- Updated safety & health guidelines for buildings: We have already observed many sanitation protocols implemented in public buildings. We should continue to observe trends such as touchless technology, motion sensors, & improved HVAC systems. In the residential market, we should expect to see more smart home technology implemented in homes. This will lead to more voice-activated features, and touchless/motion sensor technologies.
There is no doubt that there are many emerging trends throughout our society & what our new normal looks like. We are also seeing this take place throughout both commercial and residential real estate. Whether you are a home seller, home buyer, or investor, it is critical to stay on top of these evolving trends to ensure that you are staying current with the market.
In closing, South Florida continues to be one of the most highly desirable places to live in the country. If you are considering buying or selling real estate in South Florida, we can help! After all, you might as well socially distance in paradise!