The realty sector is a dynamic industry that is quickly adapting to the world of networking. Everything is interconnected and participants in this sector should not overlook developments happening within the property market, and more importantly, those happening in other economic markets as well.
According to the 37th edition of Emerging Trends in Real Estate
, a publication that discusses trends as well as forecast developments and investments in the realty sector developed by Pricewaterhousecoopers (PWC) and the Urban Land Institute (ULI), some of the leading forces that are continually interacting are technology, globalization, demography and urbanization. In the realty sector, a small miscalculation during execution or an attention lapse can end up foiling the best executed plan.
This makes it necessary to consider all trends, without isolating any, because adaptation is important in gaining the competitive advantage and surviving the industry. That said, here are four trends that will shape the future of realty in 2016:
1. Rising Investment Outside Gateway Cities
There is a growing number of 18-hour cities across the United States, including San Diego, Austin, San Antonio and Denver. These cities were featured among the top 10 entrepreneurship markets in a study conducted by the Kauffman Foundation in 2015. They are also in the 2016 Emerging Trends’ Top 20 Real Estate Markets for development and investment.
This year, there has been a growing confidence among real estate investors
in the potential of markets outside the mainstream 24 hour cities to generate good returns. This potential is increasing the desire to invest considerable amounts of capital in appealing markets located outside the traditional gateway cities. Local and international investors are broadening their investment interests as they take a look at the real estate market within the US. Four major factors fueling this trend are the strengthening of macroeconomic performance in the US, moderate compression of cap-rate, investor demonstration of risk tolerance and the unstoppable expansion of data.
2. Employment Rates will Continue to Increase Demand for Office Space
Real estate continues to benefit from the growing employment opportunities as the rate of employment grows by over 2.9 million each year since 2014. In July of this year, job opportunities grew by 2.1%. The gains of these employment rates are now spreading to different metro areas, with Los Angeles, New York, Dallas, Northern New Jersey and Fort Worth taking the lead in this shift. Uptake of office space has been fast in both suburban and central business district areas, reducing vacancy spaces by 90 points and raising rent by 2.9% each year.
This trend will continue in 2016 as entrepreneurial businesses often viewed as key to vibrant local economies continue to contribute to changes in their office floor plan to adapt to their special needs.
3. Rising Prices in Gateway Markets will Continue Creating Opportunities in Suburbs
Suburbs will continue to attract more investments as prices in major gateway cities continue to rise, according to the Emerging Trends 2016 report. While about 37% of millennials prefer to live in downtown areas of denser cities, most baby boomers prefer the suburbs. The generation Ys are following the baby boomers to suburbs during their child rearing years.
A survey conducted by ULI shows that six out of 10 respondents from generation Y hope to live in separate single family homes over the next five years. Interaction between homes and jobs
is the major factor that influences the growth of suburbs. Since 2002, jobs have been growing at a higher rate in US metropolitan areas compared to the surrounding suburban areas. While this trend has reflected in big cities like San Francisco and New York, it has also been happening in cities such as Oklahoma, Philadelphia, Milwaukee, Nashville, Portland and Austin. Access to expanding job opportunities is a major factor in the future growth of suburbs. Location matters when it comes to real estate deliberations. Trends in residential options over time will be shaped by the growing job market.
4. The Real Estate Sector will Strive to Provide Affordable Housing for All
Workforce housing and affordable housing options are also considered important by consumers. The pressure for these products is already there and continues to build. Though voters will want to push politicians to take action, it is the creative ideas applied by savvy real estate players that will determine which of those actions will be active. However, proactive trends that get ahead in the housing industry will be adopted in 2016 as these will be helpful for the industry. This will mean coming up with products that target people in different income brackets. Such products will range from rental, to ownership to rent-to-own properties.
Individuals and families wanting to build their own homes can take out loans to do so. You can also take out loans to improve your homes, or consolidate your loans to better manage your finances. You can visit as many online sites to evaluate the loan offering – in terms of amount, interest rate, repayment term, approval time and more – before filing the application. For UK residents, you can look at Secured Loan Expert
. The site offers free quotes, help and expert advice. You can take a secured loan as much as £10,000 to £2,500,000 (more by referral), the final amount contingent on your equity, with low interest rate and a flexible repayment terms from 3 to 30 years. You can easily get your secured loan in four simple steps. You can also seek Money Advice Service
, a site set up by the UK government, to help people manage their money, and make the most out of it.