As 2022 winds down, investors are beginning to look toward the new year, wondering what opportunities and pitfalls may lie ahead in the coming months. After yet another year defined by the volatility brought on by the pandemic, and in a time when investors have an unprecedented ability to easily invest in art, real estate, or other private markets using platforms like Yieldstreet, buyers are eager to know what 2023 might bring.

With January quickly approaching, let's take a look at a few trends experts believe real estate investors can expect in 2023:

Major cities will make a major comeback

Among the most dramatic shifts that emerged as a direct result of the pandemic was the mass exodus from major cities and into suburbs, small towns, and secondary markets. The desire for more space from other people, the rise and normalization of remote work, and historically low mortgage rates made for real estate booms in places like Boise, Phoenix, Nashville, and Tampa. Meanwhile, cities like New York and Los Angeles wondered if they'd ever regain the residents that fled.

Looking to 2023, however, this trend is expected to reverse in a big way. Surging house prices and rising interest rates have left many potential homebuyers all but sidelined, unable to purchase homes in the very same secondary markets that were so financially appealing just a year ago. Additionally, experts forecast that the coming year will see the continued pivot away from work-from-home models, and a slow-but-steady return to office spaces that were left vacant for long stretches during the peak of the pandemic, many of which are based in major cities.

Rental rates will keep on climbing

Rents have been steadily increasing over the last few years, and that trend doesn't look to be stopping anytime soon. Experts agree that rental rates will continue growing next year, heading for historically high levels within the first half of 2023. The main driver behind this real estate trend is that, for many, property prices have become unaffordable, which has left renting as the only plausible option. This will continue to be the case in large cities especially, as workers steadily make their post-Covid return and face the prohibitive costs of homeownership.

Overall, the increased demand and high rental rates are great news for real estate investors hoping to maximize their returns in the coming year.

Fractional Ownership will continue to rise

As property prices and mortgage rates remain high in 2023, experts predict that real estate investors will be left looking for alternative investing outside of traditional property ownership, with crowdfunding opportunities believed to be at the forefront. With platforms like Yieldstreet, investors can invest in art, real estate, and other alternatives from public markets on one platform.