The year 2024 saw a mix of challenges and opportunities for real estate, with residential markets showing signs of stabilization as inventory improved and home prices grew modestly. However, high mortgage rates and affordability challenges persisted. Commercial real estate faced significant hurdles, particularly in office spaces, due to hybrid work models and oversupply. On a positive note, innovative housing solutions like adaptive reuse projects and affordable housing initiatives gained momentum, signaling progress in addressing long-term challenges.

The most significant trends that dominated various sectors were:

1. Commercial Real Estate
   The office sector faced challenges in 2024 due to higher interest rates, oversupply, and the persistence of hybrid and remote work, leading to decreased demand. Meanwhile, the industrial sector, previously driven by e-commerce growth, slowed but showed signs of recovery as supply decreased and demand picked up.

• Residential Real Estate
  Mortgage rates remained volatile throughout the year, often exceeding 6%, creating a “lock-in effect” that discouraged homeowners from selling and constrained inventory levels. Despite this, home prices saw modest growth of 4% year-over-year by October, and the market began stabilizing with improved inventory, offering more opportunities for buyers. Meanwhile, design preferences shifted toward unique, sustainable, and practical homes, with trends favoring DIY and second-hand furniture alongside earthy tones and deep greens in interior palettes.

• Investor Activity
  Investor participation in the real estate market remained a significant force in 2024, influencing housing affordability and market dynamics in both positive and negative ways. On one hand, investors brought capital and development opportunities, leading to the construction of new housing projects and revitalization of underutilized properties. On the other hand, their activities often drove up competition, particularly in urban areas, for available properties, contributing to higher home prices and limiting affordability for first-time and low-income buyers. This dual impact sparked debates over policies to regulate investor activity while balancing the need for market growth.

• Housing Solutions
  Adaptive reuse projects gained momentum in 2024, transforming abandoned commercial spaces like strip malls and office buildings into residential units to alleviate housing shortages. Additionally, affordable housing initiatives, such as utilizing underused religious land and developing mixed-income public housing owned by local governments, played a crucial role in enhancing housing accessibility.

• Technology and Smart Homes
  The integration of technology into homes continued to rise in 2024, with smart home features becoming increasingly popular. Homebuyers sought homes with energy-efficient systems, automated devices, and enhanced security features. Technologies like smart thermostats, home assistants, and energy management systems were particularly in demand, making homes more efficient and appealing to modern buyers.

•  Sustainability and Green Building
  Sustainable construction practices gained significant traction, with an increasing number of new homes and commercial buildings being designed with eco-friendly materials and energy-efficient systems. Green building certifications, such as LEED, became more common, and buyers increasingly prioritized environmental impact in their purchase decisions. Solar panels, energy-efficient appliances, and low-carbon footprints were key selling points.

•  Rising Popularity of Suburban and Rural Areas
  As remote work continued to shape lifestyle choices, many buyers sought homes outside of urban centers. The demand for properties in suburban and rural areas increased, offering more space and affordability. This trend also drove increased interest in second homes and vacation properties, as people sought places to retreat from city life.