Multifamily And Single-Family Rentals Are Expected To Remain Robust.
According to Zillow, home prices have risen 19.5% in 2021 and are expected to rise another 11% in 2022, despite higher mortgage rates. This overheated market is driving young families out of the market since they prefer a single-family residence.
As a result of rising inflation, the real estate industry’s materials, energy, and utility costs have increased significantly. At the same time, rising rents have shown landlords an immediate return on their investment.
More Quants Will Be Involved In The Real Estate Industry
We expect more quantitative firms to invest in commercial real estate in 2021 to deploy AI and machine learning. As a result of improving the inefficiency of CRE data, firms are searching for opportunities where there is historical growth, but prices are dislocated from value.
The Office Layout Will Change, But It Will Not Close
The physical office is not dead, despite headlines to the contrary – it is looking to upgrade. While the office market is experiencing its highest vacancy rate in recent decades, investors can expect stabilization in office occupancies and rent growth this year.