New home sales increased by 43.2% in 2020 and US homebuilder sentiment is at highest for 35 years. Factors that helped fuel growth include the desire to move to the suburbs, continued low interest rates, and shift to lower-tax locations. For 2021, it is also expected that the real estate market will be strong. However, residential construction, including apartment construction, will face different constraints such as higher costs, labor skills shortage, and longer delivery times. Apartments will also see several trends such as virtual viewing, smart home tech, and community-wide offerings.
Smart Home Tech
Apartment operators are constantly seeking ways to attract potential buyers and renters by adding value to the units. Thus, gyms, pools, and lounges are going to be offered. Furthermore, residents can also expect to see a rise in smart-home technology. For example, keeping your apartment secure is not only an individual interest, but also a concern of property developers. Hence, apartment companies will invest in smart locks, remote-access thermostats, and motion-detector lighting, among others. Moreover, developers are also going to implement remote-access and touchless tech such as touchless elevators and doors to improve the safety of guests and residents.
The Vice-President of Strategic Initiatives, Adrian Adriano, believes that smart tech offers several benefits including convenience, peace of mind knowing that your place is secure and the potential energy savings gained from using efficient lighting and updated thermostats. Smart tech also helps organizations that promote these technologies such as the ability to remotely monitor building infrastructures and generate long-term savings.
Rental Prices and Enhanced Self-Guided Virtual Tours
Apartment rental prices are expected to remain stable during the first half of the year which is good news for tenants who have lost their jobs temporarily or had to reduce hours due to mandated lockdowns. Cortland’s chief economist Brad Dillman predicts that rent prices will bounce back in the second half of 2021. He also said that the rebound looks sustainable under the assumption that the job market recovers well. Another factor that will affect prices is the ability of people to return to their offices. Experts say that the recovery of the rental market will be contingent on the number of employees returning to their offices and how many workers businesses will hire to work onsite.
On the bright side, home buying will continue as low interest rates remain. According to the chief economist of the National Association of Realtors (NAR) Lawrence Yun, a surprising development in 2020 was the ‘hot housing market.’ Despite several challenges and problems, consumers looked at the low mortgage rates when considering a new home to fit new lifestyles. Hence, the housing market will remain strong this year. But, whether buying or renting an apartment, consumers could still be reluctant to do in-person visits to a property. Thus, virtual events will continue including tours, conclusion of financial transactions signing up or renewing a lease which will become a standard market trend.
2021 will see different trends in the real estate market. For apartments, prices remain stable during the first half of the year, virtual tours become the norm and adoption of smart home tech will rise.