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U.S. Real Estate Industry Analysis
Introduction
Real estate concerns the immovable type of property, such as apartments or land. This industry is essential for the stable development of the country and growth of economics since people require a place to live and work at. The current paper focuses on real estate as an industry and analyzes the primary points, such as major companies, the influence of economics, and the perspectives of the business groups in this field.
Description of the Real Estate Industry
There are different types of real estate that cover various sorts of land and construction development. They include residential buildings, such as apartments and family homes, commercial constructions, such as shops and markets, and manufacturing spaces, such as factories and warehouses. There is also a special type of real state branch that focuses on land only. Furthermore, the industry covers not only permanent ownership of property but also renting and leasing spaces for accommodation and office work (Census Bureau, NAICS category 531, 1). Another function of real estate is the management of the property which comprises selling, renting, or buying houses and land for clients on demand.
The major companies in the industry are CBRE Group, Jones Lang LaSalle (JLL), and American Tower (fortune.com, 2). While centered in America, the first two corporations provide their services all around the globe and mainly focus on residential and industrial construction. On the other hand, American Tower is a more specialized business group and focuses solely on providing wireless communications infrastructure, e.g. broadcast transmission towers.
Real Estate Executives Should Monitor the Inflation Rate
Inflation plays a crucial role in the development of the real estate industry. The continual increase in the price of materials would lead to the growing cost of the final product, e.g. residential building and manufacturing constructions. In accordance, the price of the existing property will also increase to compensate for the lack of new building. Since the cost of new accommodation is getting higher, people might consider renting instead of purchasing houses for permanent residence. The growing demand for rental property will further increase the price of this service. Nevertheless, inflation brings both good and bad news for the real estate industry. For instance, the increasing price of rental services might seem severe for residents, but at the same time, it nourishes the business. A higher income for landlords might provide a powerful boost for the overall development of economics.
Movements in the Inflation Rate
The excel table demonstrates the fluctuations of the inflation rate in the United States from 2000 to 2019. During this period, the line deviates excessively with an average of around 1.5%. However, the years 2009 and 2015 show the most impactful fluctuations with peaks of -0.4% and 0.1% correspondingly. Summing up, the current graph shows the main tendencies of the inflation rate, and one can potentially predict the outcomes for the coming years.
Perspectives of Real Estate
Due to the pandemic, the perspectives of the real estate industry remain unclear. However, it is likely that with the growth of the online market, e.g. working from home, industrial construction will become less favorable. Since the demographic of the U.S. shifts more from the urban areas to the countryside, the prospects of real estate also change accordingly (nuveen.com, 3). It is also possible that climate would commence having more impact on the choice of residential areas. Since remote work allows people to choose the place to live more deliberately, coastal cities might achieve growing popularity.
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