The Emerging Trends in Real Estate Report put together by a collaboration among the Urban Land Institute and PricewaterhouseCoopers points to nine trends currently in flux in the 2019 housing market. Despite the researchers expecting an overall economic slowdown, many of these floating trends may well provide new opportunities within the real estate industry.
Corrections in the housing market and the overall economy are anticipated in this Emerging Trends report. Underpinning any such corrections are new technology, generational and demographic changes, emerging new markets and the continued winding down of traditional retail entities. Add to these shifts is the general global economic slowdown which began in 2017 and continues today.
Far-reaching changes in industry-specific tech, startups and more transparent analytics are stimulating disruptive alternatives as to how real estate professionals do business. Investment capital is following financial tech to enable more efficient real estate transactions.
Tapering growth in population, labor force availability, and the Congressional Budget Office projections of slower GDP growth to the tune of 1.9% in 2019 make adaptive reuse and replacing older buildings and infrastructure ever more realistic than new construction.
Second cities and suburbs are looking to be key housing markets. The demands for single-family housing in 18-hour cities that are both walk-able and have public transit are high. Along with the exodus from high-cost states, 55% of new residents have relocated to the suburbs during the last 5 years. Additionally, amenity creep in the apartment arms race is seeing gyms, rooftop access, movie theaters, dog runs, communal gardens, access to co-working spaces, smart-home features and service economy firms that offer such benefits as laundry services as the new normal in multi-family housing.
Since real estate represents some 13% of the total economy, tech and machine learning-artificial intelligence directed towards real estate are exploding with investment dollars, some $5.2B in investment dollars. More and more new platforms for selling real estate and for new construction are seemingly available every day. New machine learning applications are making building management, organization, design, efficiency, safety and property access ever more efficient and time/cost-effective.
Two calls to action among real estate professionals are sounding loud and clear in 2019…curbing and controlling emissions/environmental impacts and addressing the country’s acute affordability crisis. Currently, one half of all renters spend +30% of their incomes on housing and, according to HUD, 12 million people spend 50% of their income on housing. Since 2015, affordability has been cut by 15% according to CoreLogic.
These last two issues are no longer trends in real estate; they are issues that must be met head-on in 2019 by real estate professionals. If not, these issues will only worsen and spin more out of control.
