A wide variety of highly impactful changes could be coming to the real estate industry this year. Here are at least seven significant changes real estate business owners, entrepreneurs, and investors should be watching…

Realtor Commissions

Recent lawsuits have found that NAR has illegally colluded to artificially keep Realtor commissions high.

This will not only cause consumers to lose faith in Realtors, but also to put more downward pressure on their commissions.

TikTok to Tinder

This may be the year when advertisers finally realize that no one is really buying things on Tiktok. Marketing is everything, but ROI on marketing and labor is more important than ever. Some may find that they get better results on in person marketing offline or Tinder than wasting time on TikTok.

Employees Vs. Contractors

Strict new criteria is being rolled out for classifying employees versus independent contractors. Many real estate businesses may have to restructure how they hire and what they have team members do.

This comes right on the brink of the world’s largest freelancer platform Upwork looking like it will implode after a string of terrible decisions that have burned their best customers.

New rules around employees and contractors mean that few will want to or can afford to risk even hiring remote workers in places like California or New York.

The Real Jump In Inflation May Be Coming

Consumer prices are still astronomically high, and growing. Though, recent and current events from new regulations to conflicts in the Middle East, and interruptions of shipping paths could create a new round of hyper inflation that is even more significant than post-COVID. If shipping and import costs are quadrupling right now, what will that mean for consumer prices in the next couple months?

The Next Phase Of Migration

We recently experienced huge shifts in companies and residents from places like NY to NJ and FL. That is now triggering a new round of migration from these states to new destinations like AL, SC, and OH. Some media outlets have also posed that the new American Dream is now to leave America for better lifestyles elsewhere abroad.

We’ve also recently seen more than one proposal to open up the use and sale of public lands to foreign entities and migrants.

Property Prices

While some see inflation continuing to lift property prices, other investment industry veterans expect $1T in debt defaults, and prices to fall by 50% or more over the next year or two.

Small price cuts are no longer cutting it. It has to be a complete no brainer with an existing exit at a steal of a deal price to attract solid offers and buyers.

The Middle Class Is Gone

Inflation and a weakening job market leave only room for the highly paid tech elite or the welfare class on food stamps to survive. Consider how you can serve these groups in order to keep business flowing this year.

The bottom line is that real estate investors, entrepreneurs, and business owners will have to do things differently, find new groups to serve with new proposals, and price deals differently this year. Yet, this all means immense opportunity for those who are flexible and get ahead of the curve.

The 2024 real estate market is shaping up to be an exciting landscape. An environment with its fair share of both challenges and opportunities.

What should investors be watching? How can they ace the market and win this year?

The Challenges

Uncertainty: Investors and real estate professionals should have learned to become quite comfortable with uncertainty by now. There will be plenty of it this year. Forecasts are still split between growing or nose diving property prices. Use this to your advantage instead of being hampered by it.

Buy from the bearish, and sell to the bullish.

Staffing: While AI and recent mass layoffs may be creating more unemployment, high consumer living prices mean that workers need to make more per hour in order to make working make sense for them. Be prepared to work with a leaner remote team, or pay a lot more this year.

Changing Demographics: Mass financial distress and migration are significantly changing the demographics of property buyers and tenants. Real estate businesses need to stay alert to this, and be able to adjust to these shifts in supply and demand. Average credit scores will change, as will who is investing.

The Opportunities

Motivated Sellers: While many seem very optimistic about the economy, the data seems to suggest that millions of households are facing extreme financial distress. Many appear to finally be at the end of their ability to hold on to vehicles, credit cards, and homes.

In turn this will yield many opportunities to pick up properties at deep discounts, and on better terms.

Failing Competitors: For all of the above reasons many of your competitors may fail or quit this year. These are great opportunities for acquiring their business. Either in the form of buying their companies, their real estate, or absorbing their staff and customers.

Interest Rates: The Fed is expected to begin cutting interest rates in 2024. That could translate into lower borrowing costs for businesses and real estate.

Well qualified buyers could find this makes for better financial projections when taking out mortgages. While also providing more working capital to companies, and providing room for house prices to grow. It may also encourage more owners to sell and move, creating more inventory.

Of course, you don’t have to wait on the Fed for attractive real estate financing deals. Best Transaction Funding is still offering low interest rate loan deals for real estate investors right now.