Continuing our looks at probable real estate trends in 2022
Two years ago, no one could imagine that the world would very nearly shut down, that offices would close, and employees would be sent home to work remotely. Or, that employees would choose not to come back, putting small business owners, restaurants, and other business service providers at deep risk of failure.
As a trend accelerator, COVID-19 pushed Millennials to buy homes in suburban and rural areas. Previously, younger Americans gravitated to city centers, with walkable neighborhoods, public transportation, and plenty of entertainment options and restaurants. They weren’t the only ones, of course. American adults of all ages suddenly desired more space.
COVID-19 also accelerated an extreme version of political polarization, the Counselors of Real Estate report noted.
For real estate investors, “persistent pandemic uncertainty raises real estate investment risk” across the board. Commercial property owners are focused on retaining tenants, managing cash flow and training and retaining labor. Small residential landlords, who perhaps own a few properties, are focused on tenant management and getting the rent paid, while waiting for eviction moratoriums to lapse.
And COVID-19 underscores the top issue affecting real estate over the past two years: remote work and mobility. As we end 2021, the Counselors of Real Estate noted that just 36% of office workers are back in the top 10 markets, versus 25% overall. Eighty-three percent of companies are permanently shifting to a hybrid work model, with dire implications for all sorts of real estate: residential, commercial, medical, education, and retail. Companies like Google have indefinitely postponed its employees’ return to the office.
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