In the Urban Land Institute’s annual Emerging Trends report, experts concluded that 2019’s outlook may involve more complex, overlapping trends with some unpredictable results. Will more technology be adapted into standard practices? Will the U.S. try to fix its housing affordability issues? Although, there is more questions than answers now, Curbed’s Patrick Sisson reports on 10 broad trends and innovations that is expected to shape real estate next year.
1. Tapering growth leads to a new numbers game
Less growth means a more challenging environment, and analysts predict a slow down on multiple fronts. Population growth has continued to trickle up, labor force availability, especially in the construction industry, is lackluster at best, and productivity figures for the economy at large show minuscule improvements. Add in government forecasts of an economic slowdown—Congressional Budget Office projections show average GDP growth of 1.9 percent in 2018-19, much slower than at the beginning of the current economic upswing—and real estate activity will likely taper off as well. This deceleration means identifying and capitalizing on new opportunities—such as emerging markets, replacing older buildings, adaptive reuse, and new office space—will be much harder.
2. Second cities, and now their suburbs, may be key markets
Investors have long seen urban revitalization in smaller U.S. cities as a great bet, but as these downtowns boom and millennials continue to return, young adults have started to make inroads into the suburbs. Researchers are seeing more evidence the younger generation that put off buying a home has its eyes on single-family homes, meaning that housing surrounding these so-called 18-hour cities—especially if it’s in walkable, transit-oriented developments—is in high demand. Census Bureau stats show evidence of a second-city suburban shift. Over 2.6 million people annually moved from principal cities within metropolitan areas to the suburbs in 2016 and 2017, and of the smaller markets in the ULI’s Top 20 emerging market report, 55 percent of new residents over the last five years have relocated to suburban homes.
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