Emerging Investment Trends in US Real Estate | 2021

May 12, 2021

 

2021 is the year we will beat COVID-19 and recover from the global pandemic. We will have spent far too much time in seclusion, anticipating our next moves from our computer and smartphone screens.

 

The real estate market shows much promise for the coming year – just last week we touched on rising commodity costs affecting real estate construction.

 

Today we pinpoint The Key Emerging Investment Trends in US Real Estate for 2021.
The home-owner climate, pricing, trends, investment opportunities, and 2021 hot spots…

Read on to learn about the property investment details that matter to you – the discerning investor.

Let’s go.

 

Emerging Investment Trends in US Real Estate

Home-Owner Climate:
Low housing supply
High housing demand

Pricing:
Record low mortgages
Higher construction and material costs (Lumber)

Trends:
Exodus to smaller cities & suburbs
Work restructuring to home offices

Investments:
Increase in REIT’s
Increase in Private Equity Real Estate Funds
Rentals on the increase (excepting major city centers)

Property Hotspots:
Medical, industrial and high-density residential developments

 

Home-Owner Climate:

  1. Low housing supply
  2. High housing demand

Since the onset of COVID home construction has slowed, helping to create a boom in the housing market as supply dried up.

Housing inventory is low partly because of COVID construction slowdowns, yet also due to many aging boomers holding onto their homes before downsizing.

But why is demand higher than normal? Statistics are showing that many millennials are jumping in the market. Also, in some states such as Florida, there is a steady increase of incoming residents from other states as well as from abroad. Finally, and more below, the ongoing low mortgage rates are encouraging some first-time buyers to make the jump.

 

Property Pricing:

  • Above average home value increases: Across all housing markets in 2020, home-owner property value increased at 3.5% from June 2019 to June 2020, and 12% in the 3rd quarter of 2020. Singles family homes jumped 13.4% year over year for Dec 2020.
  • Record low mortgages: continuing at 3% for 20 year terms as of May 2021.
  • Higher construction and material costs (Lumber) from 2020 into 2021.

It’s a sellers market, with much more confidence among sellers than buyers, yet, for those who play the long game, buying now can also offer rewards. Perform due analysis of neighborhood and regional long-term economic growth projections, unless the investment goal is a quick flip.

 

Trends We Have Noticed in the Last Year:

The Coronavirus Pandemic has ravaged and upturned the world. Some of our adaptive strategies have included:

  • Exodus to smaller cities & suburbs
  • Work restructuring to home offices

How many of us now work from home?
And how many of us worked from home 18 months ago?
Have any of you reading today moved your primary residence due to the Coronavirus?
And, most crucially, what are your residence plans post-COVID?

I’m sure many of us have considered the fact that in our future, remote work will remain popular…and that we will choose our lifestyles and residences to match this new trend.

 

Real Estate Investments Types on the Rise:

As investors, we are always looking for emerging opportunity. And as we know, real estate can often provide the sweet middle ground between profit and risk. So, for 2021 what we are noticing is:

  1. Increase in REIT’s (Real Estate Investment Trusts)
  2. Increase in Private Equity Real Estate Funds
  3. Rentals on the increase -excepting major city centers

Wealthy investors have the option to invest in property both directly or indirectly. 2 asset classes that are steadily increasing are property trusts and property equity funds. Both offer advantages as hands-off addition to the portfolio. Keep in mind the rising asset class of Luxury Student Housing Funds.

Upscale Luxury College Student Housing is on the Rise in the USA

Rentals are on the increase in areas with severe supply shortages, in part due to hesitation on the part of first time buyers not convinced with the low mortgage rates, as well as from those suffering from pandemic related job loss.

 

Property Hotspots for this Year:

3 sectors to pay attention to in 2021:

  1. Medical
  2. Industrial
  3. High-density residential developments

COVID caused major upheaval in hospitality, tourism, retail and office markets. 2 property types faring much better throughout the pandemic are medical and industrial. And, moving forward, high-density residential developments are anticipated to increase: to match the needs for somewhat affordable housing in urban centers, to maximize developer revenue per sq ft within soaring land price costs, as well as to provide urban professionals with a low maintenance lifestyle.

 

Today’s Takeaways

Opportunity awaits those of us with the means – and the capacity to separate the wheat from the chaff. Certain sectors of the real estate market look extremely promising, while others, hard-hit by the global coronavirus pandemic, are best avoided. Take the time to do your own research and find out where your next real estate investment lies.

 

BAI Capital has several property investment options that line up within the parameters of the 2021 trends, viable options that can help you diversify your portfolio this year – and beyond.

 

Here is one Florida property investment to consider…

 

Archer Place is a mixed use upscale condo and luxury student housing development located in Gainesville, Florida, just minutes from the many medical facilities associated with the massive University of Florida Campus and Programs. Archer Place is available for accredited investors as shares in an equity fund partnership featuring attractive annual returns, or, as outright owners in condo units available to rent directly to the thousands of medical professionals in the neighborhood. Archer Place is also a TEA approved project ideal for foreign investors looking to immigrate to the US via the EB-5 Visa Program.

BAI Capital is the developer of the Archer Place project and we are very proud to share this opportunity with you.

Learn more here >>>

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