Real Estate Trends in Surprising Areas - OZY | A Modern Media Company

Real Estate Trends in Surprising Areas

Real Estate Trends in Surprising Areas

By Stephen Starr

By Stephen Starr

From the she shed to the lawn chair, the yoga ball to the beach towel, where we park our bums has occupied our minds more than anything outside the virus itself this pandemic year. But will the lessons learned stick, and how are real estate tycoons and property gurus alike responding to these tectonic shifts? Join us as we explore whether the office is ding-dong dead, a nursing home boom is inevitable or whether Zillow is about to take over the world. Real estate is being reshaped — so buckle up, and enjoy the ride.

Unlikely Booms

Virtually Lucrative

They have a bridge to sell you: a virtual one, that is. Digital assets are all the rage, as non-fungible tokens (NFTs) have proven. The next space for expansion? Virtual property on platforms like Decentraland, a multiplayer metaverse that calls itself the “first fully decentralized world” built on the Ethereum blockchain, can be bid on and bought using cryptocurrency. With its total parcels capped at 90,000, Decentraland is incorporating the same scarcity model that helped Bitcoin rocket to the high valuations it sees today. With the ability to transform plots to everything from casinos and art galleries to music venues, some users are already seeing returns on their investments: Land sold in Decentraland for $500 in 2019 was reportedly trading for over $7,860 in early April.

Almost Heaven

Once known for its cramped coal camps, rural West Virginia is blooming as an Airbnb hot spot. A recent redesignation of the stunning New River Gorge as a national park and preserve has led to an explosion of interest from outside buyers in southern West Virginia. Small residential homes once used as squat housing for coal workers are now being swallowed up and converted into Airbnb rentals, leaving fewer options for locals. “In the past, you might have had to wait a while for a house [to come up on the market], but you could always find something,” Haynes Mansfield, who works at a local adventure resort, told OZY. But these days, folks like Mansfield are being approached by strangers asking if they can buy their houses outright — before they hit the market.

Sight Unseen

COVID was expected to zap profits for algorithm-powered real estate sites, but the pandemic has made buying sight unseen palatable, leading to a surge in sales everywhere from Salt Lake City to Atlanta. In recent years, sites like Zillow and venture-funded upstarts such as Opendoor and Offerpad have tried to ax the middleman, while owning the entire homebuying process. They’re buying properties themselves to flip — and offering their own agents and lenders. The pandemic accelerated those trends by making buyers more comfortable with virtual video tours and other remote services. That’s bad news for local brokers and private agents, who grouse that the upstarts provide subpar services compared to them. Zillow could soon dominate real estate the way Amazon dominated the online book marketplace … before it conquered the world of e-commerce itself.

Isles of COVID

When Twitter CEO Jack Dorsey banned Donald Trump from his platform, he might have done so while wearing flip-flops. He was, after all, vacationing on a French Polynesian island — and he was far from alone. Island communities opened themselves up to a number of billionaires seeking isolation from a disease-ridden world. In June, Fiji’s attorney general relayed how 30 people from a “well-known company” — believed to be Google, considering its co-founder Larry Page was seen there on his $45 million yacht — would spend three months on one of the archipelago’s islands. As of January, at least 95 boats had entered Fiji through its “Blue Lanes” program allowing free entrance to passengers with negative COVID tests.

Seoul Searching

While much of the world wonders whether high-rise offices are a thing of the past — thanks to shuttered workplaces and empty malls — South Korea is seeing a business real estate boom. Transaction volumes in Seoul have hit all-time highs despite weakened global investment and last year’s shrinking economy. Why? Demand for logistics facilities and office space in the greater Seoul region spiked as South Korea largely contained the virus — with just 107,000 cases in a nation of 52 million (similarly sized Colombia, by comparison, recorded more than 2.6 million cases). Will other countries experience an appetite for office life once their outbreaks have been contained?

Senior Living

Retirement homes were devastated by the pandemic, leaving more than 182,000 residents and staff dead in America alone — a number that exceeds total COVID deaths in all but four countries. While one might assume that would lead to seniors fleeing elderly living hubs, that’s not the case in India. This week’s deadly COVID spike in the country is sure to slow things, at least temporarily, but Indian customers, up till now, have still been keen to access on-site assistance and health care, industry leaders say. “We have already sold one-third of our inventory after the COVID-19 pandemic broke out,” Tara Singh Vachani of Antara Senior Living told the Indo-Asian News Service. “In Dehradun as well, where we had already sold 70 percent of the inventory, both [inquiries] and sales have risen.”

He’s Grabbing a Pitchfork

Once the world’s richest man, Bill Gates is now the largest owner of farmland in the United States. Even as he gives much of his wealth to charity, Farmer Bill is gobbling up new land assets. From Louisiana to Arkansas and his home state of Washington, Gates has built an empire with about 242,000 acres of American farmland, according to The Land Report. He even coughed up a reported $171 million for a 14,500-acre plot in the idyllically named Horse Heaven Hills region, not far from Microsoft’s headquarters. When asked why on Reddit, Gates said his investment group had chosen the investments but cited seed science and biofuel development as major drivers.

Your Yard: Prime Real Estate

Park Your Profits

There was couch surfing, and then there was Airbnb. But COVID has led to countless other ways to monetize living spaces. With RV sales and rentals through the roof as people hit open highways during the pandemic, Americans are renting their driveways for a few Franklins to those looking to store campers. Check local zoning laws before trying this at home. In space-strapped Toronto, home prices have shot up by 20 percent in the last year, leading homeowners to push zoning officials to let them convert parking spaces into residential units.

Ripe With Opportunity

The shift from keyboard warrior to pandemic gardener came replete with cherry tomatoes and hanging herbs. While great for budding basil growers, attempts at living the bucolic dream led to seed shortages, which were exacerbated by severe outbreaks of COVID-19 among farmworkers. In response, many new at-home gardeners sowed the seeds to meet demand, investing in household horticulture. This created a vicious (but delicious?) cycle that has seen backyard seed businesses bloom from England to Wisconsin.

Taking Charge

Would you charge electric scooters in your hallway, or sign your parking space up to become a Tesla charging station? Bird, Lime and other e-bike companies offer lucrative side gigs for the savvy scooter spotters (spend time in any major U.S. city and you’ll see pickups full of scooters whizzing by). They are available in dozens of cities across the world. And if that doesn’t sound appealing, you could always simply rent out your shed or garage as storage space through the Neighbor app.

Places Far and Away

They Could Have Used Amazon

“There’s no risk,” said Fabricio Guimarães, a middle-class Brazilian who purposefully burned a patch of the Amazon and posted the cleared plot on Facebook with an asking price of $35,000. He wasn’t the only one. As deforestation abounds in the world’s largest rainforest, Facebook Marketplace ads are selling the illegally cleared land to prospective farmers. Anybody can find the deals by searching terms such as “forest,” “native jungle” or “timber,” the BBC reported. Some of the advertised land spans as much as 1,000 soccer fields, but Facebook said it wouldn’t take down the ads because its policies already require buyers and sellers to follow local laws.

Basecamp Bitcoin

Cryptocurrency mining uses lots of electricity, so crypto farms rarely are built close to urban areas. But Russian energy giant Gazprom is taking isolation to the extreme in Siberia’s Khanty-Mansiysk, a place connected to the outside world by a single road. “The CO2 that gets freed during the oil drilling is normally a liability for oil companies as they have to burn it into the atmosphere, which results in fines,” reports CoinDesk. “However, there are ways to utilize it instead of wasting it, and electricity generation is one of them.” It could offer a brand new way to fuel electricity-guzzling crypto farms, while cutting emissions produced through the flaring of natural gas.

Shaky Markets

Housing prices rose in North America thanks in part to pandemic-fueled lumber and labor shortages. But in Turkey, shifting tectonic plates are causing an even more dramatic spike in real estate prices. The Izmir province has seen the costs of temporary housing facilities double following a devastating 7.0 magnitude earthquake that killed 114 people in October. Such prefab housing is especially crucial in Turkey, home to the world’s largest refugee population, with around 4 million people, many of whom live in nearly two dozen Turkish camps. Higher-priced temporary living is bad news for those without a home and could lead to a spike in homelessness.

Thai Malaise

From Shanghai to San Francisco, residential real estate is skyrocketing even as others flee cities in droves. But the picture is more glum in Thailand, where travel restrictions have halted cross-border travel. Condo sales in Bangkok and coastal Thai cities have been decimated, making it one of the few property markets to see prices fall in 2020. That’s because 43 percent of the foreign money buying up Thai condos — some $293 million — comes from mainland China and Hong Kong, from shoppers priced out of their home markets or looking to retire. That’s potentially great news for Thai millennials, who for years have been priced out of owning in urban real estate markets.

Past Is Prologue?

Spanish Flu: Casting Light?

The 1910s were dark: a world of stale air, crowded, smoky parlors and multigenerational housing. In fact, the wealthy shunned the outdoors and natural light in an effort to keep their skin pale — a status symbol separating them from the poor who toiled in the fields. The Spanish flu pandemic of 1918 changed all that, raising demand for natural light and cleaner air. Architects responded by incorporating more open areas, bright light and large windows into living spaces.

SARS: To Sell or Not to Sell

Residential properties have been slow to hit the market in recent months, inflating prices and rents alike. How long will that last as renters face increased pressures to find new places to live? If the 2003 SARS pandemic in Hong Kong (and elsewhere in Southeast Asia) is anything to go by, things will return to normal much faster than after other recessions, such as the 1929 and 2008 fallouts driven by faulty economic trends.

A Future After Black Death

If the post-COVID world is anything like the aftermath of the 14th century bubonic plague, it will see massive investment that changes health care and the sciences. The Black Death, as the global epidemic that struck Europe and Asia was called, forced hospitals to evolve from sick-only sites to institutions with more holistic care options. Major changes are brewing again. “Contagion-control and safety protocols put in place at the onset of the pandemic are becoming standard for new projects and renovations,” according to John Caulfield, a senior editor at Building Design + Construction magazine. The next medical care revolution will focus on remote, digital and telehealth: Germany has already passed laws allowing doctors to prescribe health care apps to patients. Artificial intelligence will play a key role in streamlining mundane tasks (say goodbye to messy insurance claims), while research from the four corners of the globe will be shared more easily than ever before.

A Catalyst for Change

The pandemic taught people to think more deeply about their homes and where they live. That has led to innovative ideas for future cities built around sustainability, such as parking garages converted into urban farms autonomously feeding locals. COVID and other animal-borne infectious diseases are often caused by human destruction of wildlife habitats. Knowing that, some of the world’s most respected scientific outlets are pointing out the merits of stopping deforestation in preventing future pandemics, with the World Health Organization calling last week for a ban on the sale of live animals at wet markets. If changing where we live means living in a more humane world, that would be one positive from a tragic year.

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