The world of 2019 evolved beyond anyone’s wildest imagination in 2020 and continues to evolve in 2021. We have witnessed an exponential growth of technology being deployed in many industries including the real estate industry; migration from densely populated urban areas to less populated and more open spaces in adjacent suburbs; a significant impact from enormous growth of e-commerce and many other changes in human behavior.
Anticipatory and strategic thinking players in the real estate industry stand at a place of tremendous opportunities if prepared to pivot and meet the evolving needs. The stage is set for a recovery in 2021 across some sectors of the real estate industry with investors seeking deals being facilitated by lower interest rates and other factors increasing demand in the market.
Here is a quick overview of what to anticipate in 2021.
Contrasting other sectors, housing has seen a boom. Single-family housing remains one of the hottest sectors of the economy, despite an initial drop from the coronavirus pandemic in the early spring of 2020. The surge in the single-family housing market is due to historically low-interest rates, growing demand from millennials no longer delaying homeownership, and the movement of city dwellers out of urban centers into sprawling suburban homes.
Successful retailers have grown their online presence and coupled it with smaller, appropriately configured storefronts and improved in-store experiences. Necessity retail-like pharmacies, grocery chains, and discount stores will continue to expand their footprints to meet demand in lower-income and lower-density areas.
Real Estate Industry Space Demand Is Driven By E-Commerce
Consumers have made permanent changes to where and how they shop. Rising e-commerce trends have untethered demand for additional warehousing. More resilient and robust distribution networks are paramount for the survival of consumer products’ retailers.
The development of new last-mile warehousing space presents opportunities as projected additional square footage will be either new or re-purposed existing space. This trend shows no signs of diminishing amid the sustained popularity of e-commerce, which accelerated during the pandemic.
The arrival and effective distribution of the coronavirus vaccine will have a major effect on this sector. Health care workers and the elderly are early recipients of the vaccine. Many property operators have been proactive in connecting with state governments and local pharmacies to get the vaccine for their residents. This will lead to unlocking demand that has been pent up over the past year as the sector looks favorable for gains in 2021.
Office Spaces Of The Future
Commercial office space owners, operators, and tenants are experiencing a shift during the pandemic. The office sector has yet to find its balance. Overall prospects for the sector won’t be clear until the virus is eradicated and normalized working patterns emerge.
Demand for office space is expected to rebound in 2021 as some office workers return to physical spaces. Office tenants will insist on more flexible space options, shorter leases to support their increasingly mobile workforce, and access to new markets of needed talent.
A final thought. What would Will Rogers say about the real estate industry in 2021?
“Don’t wait to buy real estate. Buy real estate and wait.”
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Glenn Ebersole is a registered professional engineer and is the Executive Director, Strategic Business Development/Marketing for RCS Construction — a woman owned general contractor firm — in Collegeville. He can be reached at 610-415-1130 or email@example.com.