Emerging Trends in Real Estate 2023

[Jay Thomas]

Taking the Long View

The real estate industry is moving beyond what it perceives as cyclical headwinds — i.e., rising interest rates, declining gross domestic product (GDP), sinking deal flows — and taking a long-term approach to real estate assets. The mood among the real estate professionals we interviewed for this year’s “Emerging Trends” is cautious optimism. Their plan: Ride out the current slump and reposition their firms for another period of sustained growth and strong returns.

We find it striking that so many people in the industry are willing to look beyond cyclical headwinds. As one real estate professional told us, “We’ll look back in 10 years, and the prices that seem astronomical today will seem like a bargain.”

This year’s “Emerging Trends” also reconfirms two sometimes contradictory property market trends: Aspects of the industry are “normalizing” (reverting to pre-COVID patterns), while others appear to have permanently changed as the pandemic changes how and where we use different types of properties. These patterns are playing out in how real estate professionals view prospects in the 80 markets we tracked. No matter the trends, we believe companies must be flexible and adapt quickly to market changes.