According to the latest annual report: real estate counselorAs stated by respondents, a global organization of commercial real estate owners, there are 10 major issues that will impact real estate in the coming year, and these are currently having the most significant impact on the market.
With the real estate market exhibiting extraordinary levels of unpredictability, the impact of political instability and global macroeconomic health will also affect the region, according to the 1,000-member group’s 2024 report. It is said to have an impact on real estate. This also includes office occupancy/vacancy levels and valuations, the amount of single-family inventory available, and the introduction of artificial intelligence (AI), rounding out the top four issues.
“Real estate counselors are actively aware of important themes, so they can pinpoint trends and note their evolution and subsequent impact on real estate,” he said. william mccarthy, CRE, Global Chair of The Counselors of Real Estate. “This past year has been challenging for some and an opportunity for others, as the economy, office market, and innovation continue to evolve and impact the market. Housing shortages and infrastructure issues continue to cause disruption.”
“Next year will be a pivotal year for real estate with local, regional and national elections coming up,” Mr McCarthy said. “To move beyond these disruptions with the objective of developing solutions and gaining a deeper understanding of how the issues impact and potentially change many disciplines in commercial real estate. , all eyes are on the future.”
According to Real Estate Counselors, the top 10 issues affecting real estate include:
- What will happen to the world?: Political instability and global economic health – In a market with no shortage of geopolitical, economic, and real estate risks, there will be a clear realignment of top issues in 2023-2024.
- Do I have to go to the office?: Occupancy, obsolescence, and devaluation – The future of hybrid work is still unfolding with themes such as flexibility, agility, productivity, and space reduction. What is clear is that the pandemic has caused permanent changes in the location of work, hitting both the office sector and central business districts hard.
- There’s no place like home: Global housing shortage – people need somewhere to live. This is a basic need and, frankly, a simple concept that drives significant investment in all types of residential real estate for sale and rental. Solving the country’s housing shortage is not that easy.
- How intelligent is it?: Artificial Intelligence – This powerful new technology comes at a time when there is an incredible need to measure things accurately. Access to real-time data is becoming increasingly important for investors in dynamic markets when deciding which properties to acquire, exit, or hold.
- Where did the workers go?: Labor Shortage – Everyone in almost every field reports difficulty finding skilled, willing, and capable workers. In addition to the labor shortage, there is a confluence of trends that are changing the requirements of both workers and employers.
- population shock: Migration – The pandemic and remote working have prompted major migration changes, but the fundamental driver behind that change is simple affordability.
- real estate armageddon: Economy, Interest Rates, Inflation – The recent era of “free money” came to an abrupt end with the Federal Reserve’s breakneck pace of rate hikes. The federal funds rate is currently at its highest level since 2007, and owners, investors, and developers across the commercial real estate market are feeling the effects of the rising cost of capital.
- Alexa, where’s my stuff?: Supply Chains, Logistics, and U.S. Onshoring – Container ships piling up outside California’s coastline during the pandemic have galvanized action to build more resilient and efficient supply chains, and for many It had already begun.
- Is the price…wrong?: Reset Pricing – Basic math says that as the cost of capital rises, cap rates and asset values should fall. However, the pricing reset the market had been waiting for was slow to materialize, given the frozen trading market with few reliable comps.
- london bridge falls: Infrastructure – Problems – and Huge Costs of Repair and Upgrades – America’s aging infrastructure is well documented. Infrastructure topics tend to start with the American Society of Civil Engineers (ASCE). ASCE has been producing below-average grades in the C and D range for the past 20 years (with an overall grade of C- at best in the most recent 2021 report card).