Top Real Estate Industry Trends to Watch in 2024

 

How will the broader real estate landscape shape up in 2024?

What emerging global trends influence where industry professionals, actors, and stakeholders should steer their focus and resources?

As your collaborator keeping pace with housing market innovations, I'm excited to explore those questions together here. Equipped with the right insights, you can orient your 2024 objectives toward the most lucrative opportunities.

 

Chapter 1: Overview of Key 2024 Real Estate Trends

 
real estate trends 2024

Source: Forbes

Let's dive right into the pivotal industry trends experts forecast making waves across sectors in 2024:

  • Sustainability — Eco-conscious buildings are entering the mainstream, with green certifications increasingly influencing purchases.

  • Technology — Innovations like AI and VR will continue optimizing processes for professionals and the customer experience.

  • Shared Spaces — Coworking and co-living retain appeal, especially amongst mobile younger demographics.

  • Wellness — Health and wellbeing take spotlight through amenities promoting fitness along with mental/emotional health.

  • Remote Work — More flexibility to work remotely spurs changes in location priorities long-term for homeowners.

  • Alternative Investments — Niche assets like senior housing diversify investor portfolios.

  • Affordability — Lack of affordable housing intensifies as an urgent issue needing creative solutions.

Curious how those trends might open doors in our shared real estate landscape? Read on for more on the driving forces and opportunities with each.

 
 

Chapter 2: Sustainability Defines the Future of Real Estate

Sustainability has developed into an unavoidable priority shaping practices across the real estate sector.

Let's explore what's driving this and how professionals everywhere stand to benefit from the focus on eco-friendly buildings.

Green Certifications Rising

Third-party building certifications verifying energy efficiency, conservation and overall environmental credentials have seen massive growth recently.

For example, over 80% of real estate purchases in 2024 will likely consider sustainability criteria to some degree according to recent surveys.

Clearly, credentials like LEED and BREEAM increasingly influence property desirability and decisions for many buyers, tenants or investors.

Additionally, access to community green spaces ranks increasingly high for residents choosing where to settle down.

Environmentally conscious properties clearly resonate more widely nowadays.

Key Green Building Strategies

Some prominent tactics gaining real momentum in sustainable real estate include:

  • Energy-efficient HVAC systems

  • Renewable energy sources like solar

  • Water conservation fixtures/landscaping

  • Recycled/organic construction materials

  • Waste reduction protocols

For existing buildings, energy-saving retrofits to improve insulation or upgrade to eco-friendly systems also promise major efficiency gains.

The Affordability Question

Balancing green standards with affordability poses challenges though.

Thankfully state incentives plus falling prices on solutions like solar panels help offset costs.

And certified sustainable buildings often qualify for tax breaks while allowing owners to charge premium rents or sales prices.

So ideally, environmental design stops being a niche differentiator and instead becomes a competitive necessity moving forward.

 

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Chapter 3: Digital Disruption - Proptech Innovation Powers Ahead

Technologies like artificial intelligence, augmented reality, predictive analytics and smart home automation have already begun transforming real estate processes.

But the pace of digital disruption will likely see a notable ramp-up through 2024.

Virtually every corner of the property ecosystem faces imminent opportunities to become smarter and more efficient leveraging leading-edge proptech.

Embracing Technology is Key

Closer to home, AI-powered lead generation and management technology are building significant momentum by simplifying and even improving traditional methods, with AI taking on more of the tedium that comes with cold calling, analysis, and paperwork. 

A few examples:

  • Ylopo AI (formerly rAIya) - An AI-powered text messaging assistant that engages prospects through natural conversation to gather information, set appointments, and connect them to agents.

  • MaverickRE - A software platform providing accountability and motivation by extracting key performance metrics from CRM data to measure and enhance agent activities through nudging and gamification.

  • Enhanced Valuations - Automated valuation model software like Zoodealio accelerates appraisals while drones and 3D scanning enrich property data collection.

Realtors who proactively integrating such innovations across their real estate software tech stacks will likely pull ahead of the competition.

Priority on Cybersecurity

However, increased digital connectivity also exposes the property industry to heightened cyber attack risks.

Integrating resilient networks, encryption, access controls and other security measures is imperative for owners and managers aiming to keep data, transactions and automated building functionality protected.

Looking ahead, the benchmark for real estate tech fluency will only rise.

So professionals should view advancing their digital skills and cybersecurity preparedness as pivotal investments in their future success.

 
 

Chapter 4: The Shared Space Movement - Coworking and Co-living Rising

The lines continue blurring between dedicated living and working spaces, fueling booming interest in alternatives like co-living and coworking - especially amongst younger demographics valuing flexibility, affordability and community experiences.

Coworking spaces promote networking and cost savings while allowing location independence.

Meanwhile co-living provides furnished, flexible rental arrangements with shared amenities and seamless tech/community features that remove daily life hassles.

Let's examine the data suggesting both niches still have room for massive growth in 2024 and beyond:

The outlook remains highly promising. Developers and investors that align offerings to resident priorities like flexibility and community belonging stand to capitalize on still untapped demand.

 
 

Chapter 5: The Wellness Revolution Redefines Residential Property

 
real estate trends 2024

Source: Bankrate

The integration of features and amenities promoting health/wellbeing has become a major priority within residential real estate projects competing for buyer and renter interest nowadays.

Let's look at how the intersection of design, technology and community infrastructure to support holistic wellness promises to shape housing development trends in 2024 and beyond.

Healthy Spaces Gain Value

Homes or communities explicitly designed to boost physical health through ample natural sunlight, clean air and green space access have measurable impact on resident satisfaction and mental health too according to research.

As sustainability and human-centric design practices permeate construction, properties aligning with both environmental and wellness priorities have demonstrated ability to achieve premium valuations.

Smart Wellness Features Growing

Beyond just exercise amenities, advanced smart home technology also increasingly allows homeowners to monitor and automatically optimize variables directly tied to health outcomes:

  • Air/water quality

  • Sleep cycles

  • Physical activity

  • Nutrition and more

Through intuitive apps and voice controls paired with sensors, automated lighting, and other responsive in-home features, dwellings can actively calibrate environments to augment resident health.

Holistic Living Priorities Rising

Moving forward, home assessments will likely expand beyond green certifications alone to also gauge how structural, community and technological attributes advance physical, mental and emotional well-being.

The real estate industry should prepare for marketshare battles to increasingly fought based on such holistic wellness frameworks as health-conscious demographics exert growing influence.

 
 

Chapter 6: Remote Work Revolution Reshaping Location Priorities

The tectonic shift toward remote and hybrid professional roles granting expanded location independence has shaken up housing preferences and associated market impacts already. Let's examine the crucial spatial shifts experts anticipate to continue unfolding.

Swelling Second Home Demand

As urban living lost allure due to lockdowns, demand for vacation homes and rural/suburban investment properties by affluent professionals surged over recent years.

Second home purchases enabled through location-flexible work options will keep rising over 2024 as well according to current projections.

Suburban Revival Underway

Additionally, city dwellers moving to suburban areas promising more indoor and outdoor space continue fueling housing demand across smaller metro areas. This revival along with fast-growing migration to southern and mountain states could transform property hotspots long term if the remote work revolution endures past pandemic constraints.

Changes for Urban Core Living

Within city centers, the reopened economy may draw residents back to urban amenities and stimulate the hard-hit rental market. However, impacts like higher vacancy rates and incentives could linger in very high cost-of-living cities.

Growing uncertainty over remote work longevity beyond the pandemic adds complexity when forecasting future location priorities. But the freedom to work from anywhere has granted many homeowners expanded liberty in choosing where to settle down long term across 2024.

 
 

Chapter 7: Alternative Real Estate Assets Gain Investor Attention

While residential and office assets remain dominant, investor interest is rising across specialized niches like single-family rentals, self-storage units, student housing, senior homes and manufactured rental communities. These sectors promise new opportunities.

Here’s an overview of key alternative real estate categories that continue attracting investor dollars:

Rapid Growth Projected

  • Built-to-rent communities allowing developers to own and manage portfolios of single-family rental houses continue rising despite high construction costs and long project timelines.

  • Self-storage construction is resurging as capacity lags in undersupplied markets, promising up to 12% annual returns for investors through 2025.

  • Senior housing is receiving unprecedented investment activity as aging boomers drive massive future demand, though labor constraints slow new development.

  • Manufactured home parks or land-lease communities gain favor with individual and institutional investors lured by fast-growing tenant demand.

Unique Opportunities and Risks

Compared to traditional assets like malls and offices, these specialized sectors often allow for higher yields, faster scoped deals and value-add strategies. However, niche dynamics also require deeper domain expertise.

Still, their positive demand outlook and investor advantages relative to traditional commercial real estate ensure alternative sectors will likely continue gaining asset allocation.

So whether targeting property portfolio diversification or benefiting local communities, niche assets deserve consideration by savvy investors in 2024.

 

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Chapter 8: Surging Demand for Affordable Housing

The growing gap between incomes and housing costs has ignited concerns over affordability across rental and ownership markets worldwide.

With around 68% of the global population projected to live in cities by 2050, urban affordable housing shortages will likely intensify.

Defining the Challenge

Housing is typically deemed affordable when costing below 30% of household income. However, nearly half of renters worldwide along with a growing share of buyers exceed that threshold today. This severely impacts economic stability and social equity.

Unfortunately, demand has long outpaced supply across government-subsidized low-income city housing units. Additionally, developers gravitate towards luxury builds offering higher margins.

Attempts to Bridge the Gap

Innovative affordable housing initiatives aim to alleviate this crisis through public-private partnerships between governments, financial institutions and builders leveraging:

  • Tax incentives and easing zoning barriers to motivate affordable projects with slimmer margins

  • Leveraging public land in prime locations for mixed-income developments

  • Prefabrication and other modular building techniques to cut construction costs

  • Community land trusts allowing collective nonprofit ownership to keep homes affordable longer term through resales

  • Microlending groups enabling incremental building upgrades over time

  • Shared equity models helping tenants transition into home ownership

Optimizing Solutions

While no silver bullet solution exists, optimizing existing housing inventory efficiency also helps. Converting unused office space into affordable rentals, revamping run-down public housing and allowing accessory dwelling units or multi-generational family units all add capacity.

Additionally, public perception shifting not-in-my-backyard mentalities surrounding affordable housing projects helps too. With social, health and economic stability all hinging on affordable access to quality dwellings, addressing this complex issue remains critical.

 
 

Chapter 9: Real Estate Industry Outlook

Most industry experts foresee the major economic, demographic and technology trends covered in this piece enduring over 2024 to shape global real estate for years ahead.

Here’s a recap of the pivotal shifts discussed that will likely transform market demand, development priorities, investment strategies and more:

Key 2024 Driving Forces

  • Climate change accelerating the sustainability mega-trend

  • Digital transformation optimizing processes through proptech innovation

  • Remote work flexibility shaking up location priorities long term

  • Youth generations embracing shared & flexible living spaces

  • Health consciousness making wellness top home feature priority

  • Growing niche sectors like single-family rentals attracting investors

  • Worsening affordable housing gaps demanding urgent solutions

While challenges like inflation and rising interest rates bring some uncertainty in 2023, the commercial and residential real estate industry remains resilient entering 2024.

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About the Author

Aaron “Kiwi” Franklin

Head of Growth