Purchasing real estate is typically a major investment and will likely result in years of financial responsibility until an owner re-lists a property to sell to someone else. Choosing when to buy property, how much to pay for it, when to list it and how much to ask for it are all crucial decisions for those who want to make a profit off of real estate investments.
Real estate markets constantly shift based on social and economic factors. The markets in recent years have been very hectic and competitive, but that has begun to change. What are some of the emerging trends in the residential and commercial real estate markets in the United States?
Residential real estate trends
For years now, a lack of adequate supply has plagued the residential real estate market. There may be a slight easing of that thus far in 2023, but overall, the number of people listing their houses remains relatively low. Single-family properties still tend to sell quickly and for prices noticeably higher than just a few years ago even though interest rates have started to climb. For the most part, real estate professionals predict steady demand and continued issues with supply on the residential market, barring any significant economic changes.
Commercial real estate trends
Overall, the commercial real estate market has not been quite as resilient during the recent market changes as the residential market. Multi-unit office buildings and similar facilities have seen a drop in demand and tenancy rates, as well as a softening of rental prices. However, some commercial real estate investments still offer decent returns. Multi-family rental units remain one of the most lucrative types of commercial real estate property available, with rental demand remaining steady and prices on the rise in many markets. Retail rental spaces, especially those in or proximate to dense residential neighborhoods, have outperformed many other commercial property investments in recent months.
While most real estate does tend to trend upward in value over time, being very selective about when someone buys and what type of property they invest in can make a big difference regarding the potential for a solid return on their investment. Tracking changing real estate trends as the market continues to evolve may help professionals and aspiring homeowners alike make more lucrative and informed decisions.