Having suffered many losses in the past, the real estate industry is slowly making a recovery thanks to some game-changing strategies you should probably pay close attention to in 2014.
Urban Land Institute experts gave us some insight into their”Emerging Trends in Real Estate” report at the Land Use and Planning annual conference in Chicago. Through their research from surveys and interviews with real estate developers, investors, lenders and more, these experts have outlined the top housing trends that we should expect over the next couple of years.
Millennials are new target for real estate developers
The Millennial generation has continued to spark the interest of key industry leaders. Places such as Austin, Seattle, Portland and the Twin Cities in Minneapolis are examples of cities with an increase in Millennial population and economic activity.
In fact, Andrew Warren, director of advertising and research firm PwC, was surprised that Minneapolis was ranked ninth out of the top 10 developers. It is the city’s wide diversity in economic base that has made it more attractive to younger generations. Although the diversity helps to increase the population of recent college grads, it still does not compare to the generation of Millennials who are the home-buyers.
Suburbs are going urban
Most suburban areas are losing new developments because of a loss in interest. Their interest has moved more toward “urban-minded” projects that have a central locations with amenities and public transportation. This has made development projects more easily accessible.
Second-tier cities lead the recovery
According to the ULI report back in 2011, only New York and Washington D.C. had real estate prospects for investors and developers. However, fast forward to today and Washington D.C. no longer has a vast amount of prospects. Instead, developers are now looking at places like Dallas and Portland. The fact of the matter is the game is changing and investors, developers and builders are no longer primarily interested in the never-sleeping cities like New York and San Francisco. They are becoming more interested in cities like Austin, Boston, Houston, Miami, Orange County, San Jose and Seattle because these cities offer more housing deals and land opportunities.
Job growth pushes industry recovery
The recovery of the real estate industry depends on job growth. Cities that have high unemployment will continue to suffer while cities in the Bay Area and Texas have seen strong housing recoveries because of their strengthened economy. Cities with low unemployment can expect to see more recoveries next year, while suffering cities will not.
Multi-family apartment housing will lessen
During the recession, more and more homeowners were forced to become renters, and there was a huge rise in demand for apartments. However, with a better economy, supply and demand will again switch and multi-family housing will decrease.
Pay attention to smile investments
“Smile investing” is a philosophy that real estate developers are bringing back and becoming more interested in. Developers and investors being by looking at cities in the Northeast, then throughout the sunbelt and then back up through the Northwest. This path follows an arc or smile shape. States like Florida, Texas, Arizona, Northern California, Oregon and Washington will be having more activity than areas in the Midwest.