Identifying the most important challenge for the real estate industry is an exercise that requires careful consideration of both local and global factors. There are several challenges that can affect the real estate market, from supply chain to geopolitical risks. In this article, we will discuss some of the key challenges that are facing the industry.
Increasing out-of-reach housing
Increasing out-of-reach housing is a real challenge in today’s market. In fact, the supply of affordable housing units fell by a staggering 400,000 in just the first six months of the year. In the meantime, rents are soaring and home prices are climbing. As a result, many renters are in for a rough ride.
The biggest problem is that the number of rental units required is relatively small compared to the total housing stock. While demand is growing, it is being dampened by interest rate hikes. This is especially true in the Sun Belt states. It is therefore no surprise that home prices and rents are rising at an alarming rate.
The most important part of the puzzle is to increase the supply of affordable rental housing. In order to do this, zoning rules need to be revamped to allow for more construction in more areas. Also, state and municipal policymakers need to come up with inclusionary housing mandates. These regulations would ensure that more low and moderate income families have access to affordable homes and apartments.
Changing regulations are the biggest challenge for the real estate industry. This is because the regulatory environment is not durable or predictable. Rather, it is often a chaotic and unpredictable environment, and it does not provide adequate clarity to development projects. As a result, developers have increased risk in their development projects. In some cases, new operating restrictions have been imposed on existing properties. In addition, procedural complexity can increase the fixed cost of developing a new project.
Among the changes, the federal government is adopting new regulations regarding climate change and clean energy mandates. These measures include the adoption of new green building standards, participation in carbon emission credit trading programs, and the reduction of greenhouse gas emissions.
There are many companies that are making changes to their operations to demonstrate social responsibility. This is a growing trend, and it’s causing an increase in demand for ESG disclosures.
Digital curb appeal
Having great digital curb appeal can help you sell your home for top dollar. In fact, 63% of home buyers will visit a home based on the listing image. However, you don’t want to have your listing spend too many days on the market.
You’re going to have to do a bit of legwork to make sure your property stands out from the crowd. But the most important thing is to understand what prospective home Buyers are looking for.
You’ll need to assess your home’s condition and determine which improvements are most crucial to improving its value. This is where a real estate agent can come in handy. He or she can advise you on what improvements will increase your sale price and keep your costs down.
Supply chain crisis
Several economic events have come together to create a global traffic jam. These include the recent rise in inflation and the supply chain crisis.
The rapid rise in inflation is the dominant concern for investors, businesses and consumers. But there are other factors that are worsening the situation.
The effects of these economic events will percolate into the commercial real estate industry. As a result, practitioners need to adjust their location decisions. They must consider the tradeoffs between labor availability, cost and operational quality.
The effects of the supply chain crisis will continue through 2022. The crisis is causing delays in basic building materials and product deliveries. It also creates longer lead times and more expensive material costs. Some material delays are planned around, but others can impact leases and closing dates.
The risks can manifest in the form of volatility, uncertainty, or an uncertain future impact.
Business organizations are conscripted into the geopolitical arena by competition for advanced technologies and a new national security economy. This is a reality that is creating opportunities and challenges for companies. However, leaders need to understand the implications of these events before they have a negative impact on the company.
A multinational oil and gas firm engaged Kroll to perform a geopolitical risk assessment in Turkey. The assessment evaluated the business environment in the region, analyzed the safety of the client’s employees, and provided regional political and economic outlooks. It also included case studies of companies that had participated in similar activities in the area.