A real estate market forecast is a large part of being a successful property manager. It delivers all the data you need to make the best investment decisions for your student tenants and portfolio.
The next five years promise both challenges and opportunities. However, it’s up to you to use real estate market forecasts to dodge those challenges and make the most of every opportunity.
Use our in-depth guide on real estate forecasts for the next 5 years to answer key questions on student living in the future: “Which housing developments or amenities will see the highest demand?” “Which student hotspots will grow into the next quarter?” and “Is sustainability still a real estate market driver among students?”
With our Real Estate Forecast: Next 5 Years report, you can perfectly align your portfolio with evolving student needs and set your property management business up for long-term success.
Educational trends, economic shifts, and evolving student preferences will shape the real estate forecast next 5 years. By analyzing current demands and long-term patterns, property managers can anticipate key trends and more clearly determine the future of student housing in 2025.
While there are worries about national economic growth, the global middle is growing, with more than 100 million joining the demographic each year. International students also continue to view the United States as a golden educational opportunity, with many pursuing higher education abroad to further income growth in their families.
Our findings also show many more “non-traditional students.” This group includes older students, part-time students, and those with families. These students are looking for more flexible housing prices and leasing terms, like short-term or semester-based leases.
There is also an increased demand for real estate that caters to a wider range of living needs, such as single-family homes with childcare services—either nearby or as a housing amenity.
The modern student is a digital native. As a result, expectations for housing technology have evolved tremendously.
High-speed internet, smart home technologies, and fully connected living spaces are major selling points. Some students view these amenities as necessities.
New tech, including smart thermostats, lighting systems, and security features, increases property value and demand. Smart homes meet the increased need for convenience among modern consumers. Many also provide increased security and more efficient energy usage, which provide more peace of mind and cost savings.
Property management has also changed. The modern student wants easy-to-use, Integrated tenant portals where they can pay rent, submit maintenance requests, or receive community updates on their smartphones.
Environmental sustainability is a growing concern among youths, who are now more environmentally conscious than previous generations. Students prioritize sustainability when selecting housing, driving demand for sustainable housing supply.
Based on our research, energy-efficient appliances, waste management programs, and sustainable building materials are all major contributing factors for modern students. These practices align with their awareness of environmental issues and help them actively contribute to a greener future.
Housing inventory with Leadership in Energy and Environmental Design (LEED) certifications (or a similar green certification from a national association) increases demand.
Bike storage, public transport, and renewable energy sources like solar panels can help you reduce your operational costs in the long term and increase your appeal on the housing market.
Our research has shown a major shift toward hybrid learning models, where students alternate between online and in-person classes after the pandemic. Gap years, studying abroad, and internships are also increasingly popular, which makes accommodation for non-traditional academic timelines important.
In many cases, the traditional academic year lease no longer cuts it. Offering more rental options will allow for greater adaptability to these shifting trends. Prepare for greater demand for short-term student housing with month-to-month leases starting mid-year.
According to our report on the real estate forecast in the next 5, health, wellness, and self-care are increasingly important in the student housing market and will continue to shape the real estate market forecast for the foreseeable future.
Students want more than just a place to sleep. They want a housing market that supports their academic, social, and mental health needs. This need has increased demand for communal study spaces, wellness centers, gyms, and outdoor recreation areas.
Interest rates are major influencing factors when making real estate decisions. Over the past few years, mortgage rates have increased, largely due to economic instability. Rising interest rates often translate into higher mortgage rates and house prices, making it more expensive for investors to enter the housing market.
However, experts predict that the Federal Reserve will stabilize rising interest rates and build a more stable economic environment. This Federal Reserve bank stabilization offers some predictability for property managers, primarily when considering new developments or expansions in the student housing market.
The overall real estate housing market is expected to undergo modest price growth over the next five years. The student housing market will see a similar upward price growth and demand trend.
However, the true crux lies in regional differences. These will be the key to determining the ideal investment opportunities in the housing market. Booming student populations, like those near large universities or in fast-growing urban centers, are more likely to experience greater price growth than those in other areas.
Rental home prices in the U.S. are forecasted to continue rising for the next five years. Rent increases are expected to outpace general inflation due to ongoing housing supply shortages and high demand for rental units in certain markets.
Keep an eye on local market conditions and adjust rental home prices accordingly. Always keep in mind factors like amenities, location, and the overall quality of the housing.
For student housing specifically, properties that are equipped with modern amenities and smart features will be able to command higher rent rates. Premium properties near major universities or in popular student districts will also continue to see demand from students looking for convenience and comfort.
The housing market is expected to see an increase in housing inventory by around 11.7% by 2025. This will help alleviate rising home prices in the housing market and soothe rising interest rates.
For student housing, this means more options for acquiring existing properties or new developments in the coming years.
However, there will still be housing markets with tight housing inventory and low supply. This is most notable in pent-up demand areas near major universities, which see increased student enrollment, zoning restrictions, and limited land availability.
It’s also important to adopt a proactive approach to identifying areas where student housing inventory remains low. These areas can be opportunities for development that cater to a growing student population.
The student housing market vacancy rates are expected to remain low, thanks to the consistently high demand for off-campus housing.
That being said, the overall national rental vacancy rate may see slight increases as new developments come online. From our observations, more competition tends to bring higher vacancy rates.
Fortunately, you can prepare by closely monitoring local vacancy rates and housing market demands. Use these insights to adjust your pricing and marketing models to keep your occupancy rates high.
With interest rates expected to stabilize, mortgage rates for student housing properties will likely become more predictable.
This is great for property managers hoping to enter the housing market. You’re more likely to find secure and favorable interest rates to finance new acquisitions or developments.
As mortgage rates stabilize, more investors may also enter the student housing market. This will naturally make it more competitive, so make the most of your regional mortgage rates for favorable home prices.
Housing market predictions expect a modest rise in home prices over the next 5 years. However, regional home prices will differ depending on local demand.
Property home prices may rise more sharply in areas with limited housing stock or high demand for student housing. Stay up to date with the latest market trends in your specific housing market regions to make informed choices regarding real estate and mortgage rates.
While the housing market is expected to see improvements in supply, high construction costs, labor shortages, and restrictive zoning laws limit development opportunities and remain a pressing issue for many investors. Keep an eye on local housing inventory when considering developments and acquisitions.
This shortage is also more pronounced in urban areas and college towns, where housing demand and home prices are highest.
Demand is likely to stay high, offering opportunities for property managers who are ready to meet the growing need for student accommodations.
The impact of climate change on the real estate market is increasingly significant. Properties in areas prone to extreme weather events or rising sea levels may face higher insurance costs and additional maintenance needs.
Remember to factor in these risks when investing in long-term student housing investments, specifically in areas susceptible to flooding, wildfires, or hurricanes. These are bound to influence interest rates, home prices, home price appreciations, and your rental market pool.
Housing affordability continues to be a challenge, and it may not fully return to normal until at least 2030.
For the student housing sector, this means more students may struggle to find affordable living options in high-cost cities. You can use this opportunity to offer more affordable rent options, such as shared housing or co-living arrangements.
This is sure to help you broaden the appeal of your rental properties to a larger swath of students.
Our housing market prediction data shows no need to worry about a housing market crash. While market conditions fluctuate, predominantly with interest rates and mortgage rates, the student housing market remains resilient because of continued demand for student accommodations.
While the market is expected to stabilize, it’s unlikely to shift into a buyer’s market in the near future. However, increased inventory levels and stable mortgage rates could create a more balanced market for buyers, especially in high-demand student housing markets.
Student housing looks promising, with many opportunities to capitalize on emerging trends and market shifts.
Stay informed and adapt to changes with this data, and position yourself to take advantage of interest rates, home prices, and other key real estate forecast trends.
Use College House to grow your business with comprehensive analytics and intelligence solutions. With data-driven insights, you can boost business and prove the true value of your student housing investment portfolio. Book a demo today!
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