Emerging Trends in Real Estate have studied and analyze the US Real Estate returns and Economic Growth.
As per the book, for real estate, We will see investors, developers, lenders, users, and service firms relying upon their offensive and defensive game plans.
Due to globalization and technology, Real Estate adapts into a networked world. Everything is connected and you just can’t ignore improvement and developments.
Here are the Top Trend in real estate which emphasizes the change, capacity if the economy, real estate flexibility, resilience and innovation.
- 18-Hours Cities 2.0 – The 18-hour cities have been consistently making headway in replicating pieces of what makes the gateway cities so attractive. The development and application of technology make it possible for these markets to offer the benefits of a larger urban area at a significantly lower cost. In addition, a number of the markets in the top 20 rankings of this year’s survey are consistently tagged as “cool” markets that are expanding on their own unique culture.
- Next Stop: The suburbs…What is a suburb? – “The suburbs are a long way from dead,” said one interviewee emphatically. Another industry veteran counseled, “There are only about ten dynamic downtowns in the county; the rest of the areas, people are in the suburbs.” As prices have risen in the core gateway markets, it is apparent that a fresh look at suburban opportunities is gaining favor.
- Offices: Barometer of change – The office property sector offers a direct insight into how technology disruption, generational transfer, workflow reorganization can impact real estate. Space per worker has been steadily declining, but it hasn’t been just a drive to cut costs. New space design must be attractive to the workers who companies hope to attract. This has resulted in new layouts that cater to the demands of the millennial worker, who are quickly becoming the largest percentage of the workforce. But this new space isn’t just appealing to the workers, it also addresses the way work is being done. Technology is allowing workers to be much more flexible in what they can do and where they can do it.
- A housing option for everyone – The market has been waiting for the single family housing market to return to an ownership percentage near the 66% long-term historical average. Changing demographics and household preferences are moving in a direction away from traditional homeownership. This is creating opportunities for a wider set of housing options. The single family market continues to improve in a number of markets, but first-time buyers have been slower to return to the market. Single family rental continues to develop as a preference for a number of households, who like the lower cost of entry and flexibility. Going forward, the housing market will see demand from aging baby boomers who will be looking for homes where they can age in place. While younger millennials will look for affordable options in higher cost urban areas.
- Parking for change – the search has been how to provide enough parking. That trend is changing to how do I profitably repurpose the parking I have? Tenants who once required a set number of parking spaces per employee are reducing their demand as workers expand their use of alternative commuting methods. Mass transit, bicycles, ride sharing, and walking are becoming more popular ways to get to and from work. Another issue is how to provide parking to tenants who have a large number of workers with alternative work arrangements, but who may be in the office at the same time. Building owners will need to find alternative ways to generate revenue from resources currently devoted to parking.
- Infrastructure: Network it! Brand it! – Infrastructure solutions in the U.S. have traditionally been allocated to large government sponsored projects. With the number of infrastructure needs in markets across the country becoming more numerous and varied the opportunity exists for private investment to become more involved in providing solutions. These solutions are good for the community, and if designed appropriately can be profitable for investors.
- Food is getting bigger and closer – What is the solution when you have a generation that clearly expresses a desire to eat fresh more nutritious foods but chooses to live in large urban areas? One way to meet this need is with urban farming. Not only does urban farming utilize rooftops, it is also bringing new life to obsolete urban industrial properties.
- Consolidation breeds specialization – The real estate market continues to experience consolidation as market participants look for greater market share and operating efficiency through acquisition. The market, however, has realized that there is still room for those who specialize. This specialization reminds us that real estate is still a hand-on investment that benefits from local expertise. Specialization allows developers, owners, service providers, and operators to provide that expertise to a growing variety of real estate investments.
- We raised the capital, now what do we do with it? – Domestic and global capital continues to flow into the U.S. real estate market. Global uncertainty and financial market volatility continue to enhance the attractiveness of hard assets in relatively stable markets. The big six markets that have been the number one choice of many investors have seen prices reach a level where investors are now seriously considering expanding to a wider market set and alternative investment choices.
- Return of the human touch – Technology, big data, and increased market transparency has led to the perception that real estate investing can be done using an algorithm. While these tools have made it greatly enhanced the ability of investors to target specific investments and increase confidence in underwriting assumptions, it still takes the human touch and experience to make it work.