Companies in the real estate industry are good at reading the tea leaves and devising their plans and strategies for the coming year. But business strategies can fall apart in the face of chaos and uncertainty, which is all the forecasters have to offer as we head into 2026.

“Real estate emerged from its interest rate-driven repricing cycle in 2025 to face sticky inflation and interest rates alongside policy that raises new risks for real estate demand,” according to the opening salvo of the PWC and Urban Land Institute’s 2025  Emerging Trends in Real Estate annual report. “Economic uncertainty looms large over the U.S. economy amid stark changes to fiscal, trade, and immigration policy, generating a fog over the path forward.”

In normal times, real estate companies look at relevant existing factors such as employment trends, housing availability, home price growth, homebuilding costs, inflation, and GDP to create their forecasts.

Not so in the current economic environment. A vice chair at a global investment bank was quoted in the report, saying,  “When thinking about real estate, we tend to discount exogenous events. But we live in a more volatile world with a higher propensity for exogenous events.”

What is causing the uncertainty, according to the report,  are those exogenous events the vice chair was talking about: tariff, immigration and interest rate uncertainty. How are these elements impacting real estate?

According to ULI and PWC, tariffs have raised construction costs and dampened consumer spending. Immigration policy has reduced the working-age population, lowering economic growth and real estate demand, not to mention leaving the homebuilding industry hamstrung for workers.

All of this is leading to interest rate uncertainty, as it remains unknown what effect tariffs will have on inflation, and how a reduced labor supply might pause the Federal Reserve’s rate cuts.

Hence, the fog.

Business owners in the real estate industry must remain hyper aware of how these events are affecting their local markets and adjust accordingly in the coming year.

One way to do that is to stay connected to your local real estate professional organizations to make sure you know what is happening with builders, appraisers, real estate agents,  and lenders to assess what trends are emerging as they are happening.

Diversify your product offerings, but make sure you are tracking and supporting the segment of the market that is providing the most reliable source of business.

Build financial resilience and avoid taking unnecessary financial risks.

And finally, leverage your existing technology, especially your data, to monitor trends, forecast performance, and identify potential risks and opportunities swiftly.