Elements that will affect the future of Real Estate!

There is much to be grateful for among those who owned property and worked during the pandemic.

Consumer confidence and home values are rising across much of the country. Unfortunately, our country is divided along numerous lines.  Even though the pandemic may have been beneficial to some, it has also been detrimental to others, both economically and humanely. In many cases, what we take for granted is only available to those around the globe on their “to-do” lists. Keeping this in mind, I pray most will choose to be appreciative for our many benefits.

Although the holidays bring joy, there is a tinge of worry.  Today’s United States is vastly different from the one that existed only a few short years ago.  Our society and economy are shifting in a troubling direction, and the lack of leadership at all levels of government suggests a bleaker future.

Top economists, and real estate professionals predict elements that will affect the future of real estate:

1.Violent crime has increased significantly

There has been a rise in crime in the United States, whether it’s a car crashing into a bunch of people, smashing, and snatching robbery, or the overall increase in violent deaths.  A 25 percent increase over 2019 is expected in homicide rates for 2020, according to FBI data.

“The reasons for the substantial spike in violence are a matter of speculation and are likely to remain poorly understood for years to come,” the Washington Post stated in July of 2021.  More importantly we are experiencing organized numbers of thieves attacking and stealing as much merchandise as possible and it’s becoming significant. With this in mind many people are rethinking where they reside or even deciding not to purchase a home in an area, they fear will have a high crime rate

2. Climate Change

Regardless of whether you believe in global warming or not, our climate is changing.

A growing number of natural disasters are being exacerbated by the changing climate. Who decides these phenomena, and initiatives in potential prevention? These United States are taking extreme action to accommodate measures to lessen the stress to the environment.  However, our efforts are strongly countered 10-fold or more by Asia and Russia!  These two regions produce the most pollutants and the U.S. continues to purchase their products and drive these countries to produce more pollutants with no end in sight!

The American public is becoming extremely unbalanced and the consequences overwhelming to accommodate so much radical change in accommodating global climate change.  The United States Congress must revisit their strategy and find less strain on the American public or we may see a whole new deteriorating environment.

Even the most casual observer can see that we will need to make significant adjustments in the location and construction of our homes.  In addition, we must strategize for dealing with individuals who now reside in danger zones. Rebuilding is being hampered by restrictions in Future Land Use criteria already in place and making it extremely difficult to provide permits, which raises a new set of challenges.  

3. Disparity in wealth in this United States

There is a significant divide between the rich and poor.  It’s not hard to find information regarding how wealth is being redistributed in the United States by searching for “wealth in America” online.  The pandemic has simply widened the disparity between the wealthy and the poor, and this redistribution comes at the expense of the vulnerable.

We should expect a ripple effect from rising housing prices and a large percentage of Americans receiving some form of government assistance.  An obvious example is the expanding number of homeless tent cities that can be found in most major American cities.

4. Cyber crime is rising.

No one appears to be safe from cyber-crime, despite our best efforts.  A rush has been put on title firms and others in the real estate industry to make certain that transactions are secure, and payments are delivered to the correct recipients.  From Facebook hackers to obtaining credit card I.D.’s on the dark web, compromising a significant amount of victims, creating credit challenges for many looking to buy their first home. Fake websites soliciting goods that do not exist and almost impossible to catch and prosecute.

5. Racial tensions

Racial tensions remain high in the United States today.  Racism in the United States has risen sharply in the wake of recent tragedies.  In addition to whites and blacks, we see other ethnic groups influenced by this. No matter how many demonstrations, we see groups exploiting this and looting small and large businesses.  

When it comes to home ownership, minorities have a significantly lower rate of home ownership than their white peers.  For at least 10 decades both political parties have made attempts to remedy this challenge with o known solutions, despite the existence of fair housing regulations.

6. Problems with the supply chain

Containers being washed overboard at sea; container ships unable to unload; China building super ports, factory shutdowns; wildfire-induced lumber mill closures; global stainless-steel shortages; labor shortages everywhere; rising energy costs; a 30-year high inflation rate — it’s a perfect storm.  The supply chain is in chaos.

As a result, there are fewer new construction starts, considerably fewer home completions, more time spent on home preparation for sale, and less time spent on home remodeling due to a lack of inventory sellers are finding there is no need to prepare needed elements in the home before selling.

Recently, a recent excursion to an IKEA in the Jacksonville Florida area, found many furniture items that were temporarily unavailable, as well as many counter alternatives, appliances, lighting fixtures and other upgrade-related products, for example.

Plastic plants, on the other hand, appeared to be plentiful.  A recent trip to Home Depot indicates they have no shortage in inventory.  Is this a myth, a rumor to create panic, or something else?

7. The labor market is becoming smaller.

In this case, there are three major concerns:  It’s becoming increasingly difficult to find skilled tradespeople in metropolitan regions due to more and more illegal immigrants taking these jobs away from legalized US Citizens in the construction trade and there is no true policing policies being taken to prevent it! This is encouraging economic adjustments or retirement of older workers.  For geopolitical or financial reasons, many of the city’s current tradespeople are either unable or unwilling to relocate to urban regions.

Students graduating from high school are increasingly choosing university and tech careers over vocational schools because of our country’s focus on the technology industry.

When it comes to finding qualified contractors, the home market is in a state of severe stress.

8. The lack of effective answers to the housing shortage.

Another symptom of a housing issue is that more and more people are becoming homeless.  Additionally, Redfin points out that rents are expected to rise, and recent data indicates this is happening now, which will only worsen the situation.

Many landlords have had to give up and liquidate their rental properties because of the pandemic-related moratoriums on evictions and the resulting decrease in rent payments.  As prices continue to rise, more and more investors are selling to maximize their profits.

A growing number of developers are resisting low-cost housing rules, claiming that rising building costs and permission fees are reducing profitability, which no longer justifies their ongoing building in the huge multi-unit market.  I’m aware of no city or town that has an effective strategy for dealing with the rising housing crisis.

State-level taxes (California) are leading landlords to find creative solutions, such as refinancing properties to the max, taking the money out of California and not leaving enough cash flow to appropriately maintain the properties.

9. Widening chasm between liberals and conservatives

My neighbors have made the decision to leave their current location and relocate to regions that better reflect their political beliefs.  When it comes to political tensions, they’re fed up with it.  People who want to live in locations where they are more likely to be politically aligned are looking to do so.

In this case, there are two essential concerns: If we had neighborhoods that were well-balanced in terms of political viewpoints, we would have a much healthier country.

Destination cities like (Charleston, South Carolina), (Savannah Georgia) (San Antonio, and Austin, Texas) to name a few, are experiencing enormous increases in property prices because of supply and demand economics, which has the local population extremely frustrated and angry.

The COVID-19 immunizations are dividing opinion, and that’s just going to get worse.  Vaccination has a similar effect to the prior item, even though it is divided along party lines in some ways.  More tragically, the vaccination crisis is causing families to fall apart and friends to distance themselves from one another.  As a result, many families are relocating from places where the vaccination rate is low to areas where the rate is high.

10. There are increasing concerns about the insure ability of automobiles and other vehicles.

Several insurance companies have withdrawn from the market as the frequency and severity of natural catastrophes rise.  It’s getting increasingly difficult to obtain insurance in high fire or flood zones, which will have an impact on the ability to own or develop properties in specific areas.

During this time of year, I want to emphasize once again how fortunate we are as a nation.  I’d like to express my gratitude.  In the meantime, I’m concerned that we’re losing progress because we can’t seem to deal with these new issues efficiently.  These problems appear to have been exacerbated by the pandemic, according to some observers.

It seems to me that COVID-19 has just pushed issues that had been simmering to the surface. Because of the pandemic, these challenges have been brought to light in an unprecedented way.  It’s my hope that we can all work together to bring America back from the brink of disaster by putting aside our ideological differences and trying to find common ground.