Top Real Estate Trends To Watch Out For This Year

Housing Inventory Stays Tight

The real estate market continues to face a fundamental challenge: not enough homes to meet buyer demand. While the appetite for housing remains strong, several contributing factors are keeping inventory levels stubbornly low.

What’s Causing the Low Supply?

High demand, limited listings: Buyer interest has outpaced available properties in many regions, creating a highly competitive environment.
Homeowners stay put: Many homeowners are hanging on to historically low mortgage rates secured in previous years, unwilling to trade up or move out into today’s higher rate environment.
New builds can’t catch up: While construction activity exists, it’s not moving fast enough. Builders face rising material costs, labor shortages, and restrictive zoning laws that slow down new housing developments.

Why It Matters

Higher prices across the board: Tight inventory pushes home prices up as buyers compete for fewer options.
Fewer choices for buyers: Especially challenging for first time buyers and those relocating.
Rental demand increases: With less housing inventory to buy, more people turn to renting, putting further pressure on the rental market.

Until these supply side constraints ease, housing inventory is expected to stay tight shaping buyer behavior, pricing trends, and developer strategies in 2024 and beyond.

Rising Mortgage Rates Shift Buyer Behavior

Affordability is taking a hit. First time buyers already challenged by steep home prices are now also facing higher monthly payments thanks to relentless interest rate hikes. For many, it’s a matter of waiting longer, settling for less, or stepping out of the market altogether.

Move up buyers aren’t having an easier time. Even if they’ve built equity, many are locked into ultra low interest rates from the past few years. Trading up now could mean doubling their mortgage cost for a modest upgrade. That math just doesn’t make sense for a lot of families.

Meanwhile, cash buyers and investors are stepping in where others hesitate. Without loan dependencies, they’re negotiating harder, moving faster, and often outcompeting average buyers. In a tight, high cost market, capital wins. This aggressive posture is reshaping buyer dynamics turning what used to be an even field into one increasingly split by who can move and who simply can’t.

Suburban & Secondary Cities Gain Popularity

Remote work is still a powerful force in real estate. With more professionals untethered from the office, buyers are looking beyond major metros. The pitch is simple: more space, less chaos, better value. Instead of squeezing into a city condo, people are planting roots in smaller cities and suburban pockets where they can stretch out and breathe.

Lifestyle matters now more than ever. Buyers want homes that work as offices, gyms, and sanctuaries. Commute times don’t weigh as heavily. Instead, walkable neighborhoods, nature access, and local scenes tip the scale.

Smaller markets are reaping the benefits. Places like Boise, Chattanooga, and Rochester are seeing stronger demand, lower churn, and steadier pricing. The pandemic may have triggered the shift, but work from home has made it stick. It’s not just a trend it’s the new map.

(Explore deeper insights here: market trends to watch)

Tech Driven Real Estate Experience

The real estate industry isn’t what it was five years ago and that’s a good thing. Buyers now expect to tour properties from their phones before committing to an in person visit. Virtual walk throughs have gone from a bonus to a baseline, and that’s just the start. Platforms are pairing these tours with AI driven matchmaking tools that help buyers see homes tailored to their budget, tastes, and even lifestyle preferences.

But it doesn’t stop at the search. Blockchain technology is making digital closings more secure and efficient. Title transfers, escrows, and notarizations are moving online, reducing paperwork and cutting down the time it takes to finalize a deal. For agents and clients alike, fewer headaches, fewer delays.

Meanwhile, data analytics is becoming the secret weapon behind smarter pricing. Agents can now tap into real time local data to adjust listings dynamically keeping sellers competitive without overshooting. The tech doesn’t replace expertise, but it does sharpen it.

Bottom line: tech isn’t just a trend it’s table stakes. Those who adapt will close faster, smarter, and with less friction.

Rental Market Gets Competitive

Rents in major metros aren’t cooling off anytime soon. Cities like New York, Austin, and Miami are still clocking record high prices, pushing renters to make faster decisions or compromise on space and location. Even with remote work flexibility, the demand for well located rentals continues outpacing available units.

One reason? Institutional investors are scaling up their presence in the rental sector. Large firms now own growing chunks of single family homes and apartment complexes, tightening supply and stabilizing rents at higher levels. They’re playing for long term income, and they’re not in the business of cutting deals.

At the same time, build to rent developments are expanding fast. These purpose built neighborhoods, designed specifically for renters, are cropping up in suburbs and secondary markets from Phoenix to Charlotte. The model offers flexibility for renters and predictable returns for investors and it’s becoming a major force in shaping what rental living looks like now.

Bottom line: the rental game is getting more crowded, more expensive, and more professional. Whether you’re a tenant or a small time landlord, the pressure is real.

Sustainability Becomes a Dealbreaker

Buyers aren’t just asking about square footage anymore they want homes that waste less and do more. Energy efficient appliances, solar panels, smart thermostats, and EV chargers are moving from “nice to have” into “dealbreaker” territory. People are paying closer attention to long term cost savings, lower utility bills, and their carbon footprint.

That shift is also affecting how properties are valued. Green certified homes often sell faster and at a premium. Even smaller upgrades like better insulation or LED lighting can tilt buyer decisions. For sellers and agents, it’s not just about curb appeal it’s what’s behind the walls, on the roof, and wired into the home.

Developers are catching on. Eco conscious design is no longer just a niche offering. New builds are starting to include smart water systems, passive heating and cooling designs, and sustainable materials right from the blueprint stage. The message is clear: if your property isn’t built to think ahead, buyers will move on.

(For more insights, check out the breakdown here: market trends to watch)

Investors Stay Cautious but Opportunistic

Rising interest rates have forced real estate investors to tighten their playbooks. The days of fast flips and blind bidding are cooling off. With borrowing costs higher than they’ve been in over a decade, the math on speculative flipping just doesn’t work like it used to. Holding a property too long or missing your timing now means shrinking margins or flat out losses.

That’s why long term, buy and hold strategies are making a comeback. Investors focused on steady cash flow and slow appreciation are better suited for today’s environment. It’s less about timing the market and more about riding it with endurance. Multifamily properties, in particular, are seeing fresh interest especially those in areas with solid rental demand and low vacancy rates.

Mixed use developments are also getting more attention. Spaces that combine residential, retail, and commercial elements offer better risk protection, especially in urban cores where foot traffic is strong. Investors want durability and long term relevance not a quick win that turns into a tax headache.

The new rules are simple: be selective, play the long game, and watch your numbers closely. Opportunists who think in quarters might get burned. Builders of portfolios built to last? They’re still in the game.

What to Keep an Eye On

There’s a policy layer in play that real estate pros can’t afford to ignore.

Let’s start with local zoning. Cities are loosening restrictions to tackle housing shortages more duplexes where single family homes once ruled, fewer parking requirements, and faster approval for high density projects. For developers and investors, it opens up new build opportunities. For locals? It means change, fast.

Then there’s the remote work factor. As companies settle on hybrid or return to office mandates, we’re seeing ripple effects. Demand is slowing in outer ring suburbs and picking back up in city cores that were struggling just two years ago. It’s not just where people live but how often they’re there that’s shifting the market again.

And finally, macro policy. The Fed’s interest rate decisions and ongoing inflation concerns continue to shape both pricing and lending. For buyers, higher borrowing costs mean reduced purchasing power. For sellers and investors, deal timing is more critical than ever. The long game is still in play but only for those watching the broader economic chessboard closely.