LaSalle Investment Management's Investment Strategy Annual has identified 2014's drivers of growth in the global property market as: demographics, technology, and urbanization.
Key trends behind these three global drivers in the U.S. are:
Millennials are finally moving out, most notably to municipalities/neighborhoods just outside of urban cities. Rent is more affordable just outside of the urban cores, public transportation to work is available, and urban amenities are still available.
New investment opportunities can be found in warehouses and office spaces due to the increasing demands for space by companies involved in e-commerce and cloud computing.
Increased demand for property for mixed-use developments and businesses could spark revitalization of cities where supply is more available.
The American Institute of Architects's 2013 Home Design Trends Survey supports the Investment Strategy Annual's emphasis on the demand for mixed-use developments in 2014, not only for Millennials, but for homeowners in general. Between 2012 and 2013, homeowner preferences for mixed-use developments increased 13 percent.
Post Independent's recent interview with demographer Arthur Nelson outlines a new housing frontier in the year 2040, when people will be living in "megapolitan" areas versus metropolitan areas. Nelson says that the new frontier is in the West, but his predictions would apply to generational shifts in housing preferences nationally. We'll leave you with two points from Post Independent's interview to mull over:
Ownership of single-family dwellings will plummet as the demand for rentals climbs. Nelson calculates that, by 2040, the United States — with an estimated population of roughly 450 million — will need 464 billion square feet of new retail, residential, office and educational space. He recommends that communities start preparing for the future now, rather than waiting passively until change is forced upon them.
From 1950 to 2010, the baby boomers drove the market. They made up 84 percent of America’s housing demand. Between 1990 and 2000, about three-quarters of all houses built were single-family detached homes in the suburbs. Yet people can’t seem to grasp that pattern is history. When we look forward, it’s a little daunting: That same 84 percent who drove the demand for suburban homes will drive the demand for smaller lots, smaller homes and rental homes.