Despite years of doom and gloom projections from experts, the real estate boom continues with real estate valuations breaking records in many cities across the US and Canada.  Fortunately, leading real estate authorities maintain that negative projections about an imminent crash in the housing market appear to be premature.

At present, real estate industry trends point to a complex future where creativity and resourcefulness continue to fuel elevated real estate values. Here are eight real estate industry trends explored in depth:

1. Low Interest Rates

Interest rates are market prices, which means that they are a product of basic supply and demand in the bond market. Interest rates are nearing record lows in both the US and Canada. Recent trade tensions have provided the rationale for keeping rates low for the time being. This 10-year trend continues to make borrowing easy. When it comes to real estate industry trends, low interest rates mean that it is still a buyers’ market, despite astronomical prices.

At the same time, mortgage rates have been falling which has brought down some of the most elevated prices we’ve seen, which is good news for people who are able to buy a home. Some worry these trends are artificial and subject to volatility, but there’s no end in sight…yet.

2. Secondary-Tier Cities Are Growing

The famous maxim that the three most important things in real estate are location, location, and location still holds true, although the geographic range of desirable locations continues to expand as buyers have ventured ever further outside major real estate markets in search of more favourable prices. The record-breaking prices in first-tier cities have been a boom to surrounding municipalities.

Being priced-out of first-tier cities will likely continue to push homebuyers and real estate investors into neighbouring communities where prices are lower for the foreseeable future. A number of major employers, including Apple, Toyota, and Amazon, have also been drawn to these second-tier markets, announcing projects just outside major cities.

3. Transformation and Creativity

Real estate has always been an industry where any number of different investing strategies can prove successful. The uncertainty and instability of the current real estate market means commissions and income may be inconsistent, although there are companies that can help to advance the commission pay for real estate agents.

However, this also produced unique opportunities for innovation and creativity. Despite reaching maturity as an asset class, the real estate industry is undergoing a process of transformation.  More and more capital has flooded this sector of the economy in the 10 years since the 2008 housing crisis, producing high valuations and concerns about affordability.

For the most part, new technology has only begun to disrupt real estate with PropTech, or property technology, only recently emerging as an industry buzzword. Foreign investment has grown to unprecedented levels.  The threat of government intervention like the 15 per cent surtax on foreign investors that was introduced in several Canadian cities appears to be the only way to cool foreign investment. All of these factors have produced a real estate environment in which innovation, creativity and above all, adaptability will be rewarded.

4. Concern About Housing Affordability

Affordability is an issue in every market with a population greater than 1 million people. High prices have effectively priced-out large segments of the population and barriers to entry appear to have discouraged or delayed many millennials and first-time buyers from entering the market. At the same time in many cities, development has not been able to keep pace with demand.

These real estate industry trends are likely to continue, driving more and more people into multi-family dwellings and the rental market.

5. Growth in Multi-family Dwellings

Concerns about housing and affordability in major real estate markets have incentivized investment in multi-family dwellings like apartment complexes. Though more expensive, multi-family dwellings are easier to finance and major financial institutions have been pursuing investments in this area.

At present, more and more people are renting as renting is more affordable in 59% of housing markets in the United States. Property management of a multi-family property can create a steady stream of ready capital.  Rents have been climbing along with real estate prices.

6. Millennials Entering the Market

Born between the early 1980s and the late 1990s, millennials are set to be entering home buying age for the first time. With 74 million millennials in the US, they are also set to outnumber baby boomers as the largest generation for the first time in 2019.

Considerable panic has attended every millennial tastes and habits from avocado toast to social media, but it is important to separate media hype from reality. As millennial homeownership rates continue to be below average, the real estate industry trends will have to adapt to meet their needs.

7. Growth in Senior Living Facilities

Baby Boomers are people born between 1946 and 1964 and they make up nearly 75 million people in the United States today. With boomers in their 50s and 70s today, more and more of this generation are poised to enter senior living facilities.

-Not surprisingly, recent trends have seen increased investment in senior living facilities. More and more investor have been targeting independent living units, assisted living facilities, nursing homes, and other long-term care facilities.

8. Investment in Industrial Real Estate

While commercial real estate and retail have been uncertain in recent years, large financial institutions have been aggressively pursuing investments in larger real estate projects for industrial facilities like warehouses and fulfillment centres.