5 Reasons Behind The Growth of The Real Estate Industry After The Pandemic

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  • The real estate industry has grown during the pandemic, with 5 million homes sold in 2020.
  • Low-interest rates and the shift to remote working have driven demand for housing.
  • Technology has made it easier for buyers to find their dream homes through virtual tours and online listings.
  • Demographic shifts such as baby boomers retiring and Gen Z entering the market have increased demand for housing.
  • Investing in real estate can be done by becoming an agent, investing in funds or REITs, or buying a property.

The real estate industry has been one of the most affected sectors by the pandemic, but it is now showing signs of a strong comeback. The pandemic has changed how people live, work, and interact, shifting the real estate market’s landscape. Here’s what you need to know about the industry, the reasons behind its growth after the pandemic, and how you can start investing in it.

The Real Estate Industry After The Pandemic

It’s estimated that about five million homes were sold in 2020, 3% more than the year before. The rental market has also seen a surge in interest and occupancy rates, despite an overall slowdown due to the pandemic. The industry is worth over a trillion dollars and growing annually.

The Reasons Behind Its Growth

There are many reasons behind the growth of the industry. Here are some of them:

Mortgage rates and percentages

Low-Interest Rates

Low-interest rates are one of the main reasons behind the real estate industry’s growth. The Federal Reserve has lowered interest rates, leading to a surge of new homebuyers and people refinancing their homes. The low-interest rates make it more affordable for people to buy a home, which drives the demand for housing and prices up. For the first time in years, buying a house is cheaper than renting in some areas.

Working-From-Home Trend

Another reason behind the real estate industry’s growth is the working-from-home trend. As more businesses adopt remote workforces, people no longer need to live close to their offices. This has led to people moving to more affordable and spacious suburban areas. The shift from urban to suburban has led to a surge in demand for larger homes with outdoor spaces. Real estate professionals predict this trend will continue even after the pandemic ends.

Rural Living

The pandemic has also led to an increase in demand for rural living. People want to escape the city and enjoy a simpler way of life. Rural areas offer more affordable housing, larger homes, and more space. The shift to rural living has also been driven by the ability to work remotely. This trend has created new opportunities for people to invest in vacation homes, rental properties, and ranches.

Technology

Technology has played a significant role in the real estate industry’s growth. Virtual tours, video conferencing, and online listings have made it easier for homebuyers to find their dream homes. Virtual tours have become a viable alternative to in-person tours, allowing buyers to view properties from the comfort of their homes. Online listings have also made it easier for buyers to find homes in more desirable locations beyond their local area.

Demographic Shifts

Finally, demographic shifts have affected the real estate industry’s growth. Baby boomers are retiring and downsizing, while millennials are entering their prime home-buying years. Additionally, Generation Z is becoming a significant force in the housing market. As these demographic shifts occur, they drive up demand for housing, creating a seller’s market where homes sell quickly, and bidding wars occur.

How to Start Investing

Now you know the reasons behind the industry’s growth. But how do you start investing in real estate? There are many ways to get started.

Agent giving keys to buyer

Become a Real Estate Agent

One of the best ways to take advantage of the industry’s growth while investing in it is to become an agent. You can make money from commissions when you help people buy or sell a home.

Understanding the local real estate market and laws is essential, but once you have that knowledge, you can start making money immediately. However, ensure that you join a reputable 100% commission real estate broker in your area. Most brokers only give a portion of the commission to agents, but if you find one offering 100%, you can keep all your earnings. It’s the best option to get the most money from your service.

Invest in Real Estate Funds

Real estate funds invest in income-generating properties such as apartment complexes and office buildings. The funds are managed by real estate professionals who manage the properties and collect rent from tenants. Depending on your risk tolerance, you can invest in a fund with as little or as much money as you want.

Real estate funds offer passive income opportunities with relatively low risks compared to other investment options. They also offer diversification since they often have hundreds of investments across different locations and asset classes. It’s a great way to start if you don’t want to manage rental properties.

Invest in REITs

REITs (real estate investment trusts) own or finance income-generating real estate investments. REITs pay investors regular dividends based on their profits, so it’s an excellent option for income-seeking investors. REITs are also highly liquid, so you can sell them quickly if needed.

The real estate industry shows signs of growth after the pandemic, and there are plenty of opportunities to get involved and start investing in it. Whether you become an agent, invest in a fund or REIT, or buy your property, you can benefit from the industry’s growth while potentially earning passive income. With research and careful planning, you can find the right investment that meets your needs and goals.

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