The Urban Land Institute’s annual Emerging Trends in Real Estate Report has concluded that, currently, real estate in the United States presents a more promising outlook compared to much of the rest of the world. This is great news, right? However, there is always a catch. Our current situation can bring with it certain risks and challenges as well. After the crash our market moved into a more peaceful period and more mature market but that doesn’t mean that all issues have disappeared.
Some of these issues and predicted trends are not due to any fault in the market but rather a change in the buying or renting patterns of millennials. One investor said “jobs are no longer careers, and millennials are not yet looking for the commitment of owning a home. They are footloose in the job market, and footloose as to roots in the community.”
Another trend that might have a potentially negative affect is the shortage of labor in the construction industry. This would seriously impact development and real estate. According to the original article on Curbed, as of April there were over 200,000 vacant job openings in the field of building construction.
Lastly, affordable housing is becoming harder and harder to come by. Housing prices are rising 5% annually which is double the rise of income. In regards to that growing issue, the article stated that “expanding the pool of affordable housing may make for a more long-term investment strategy: growing the market and community and reaping incremental profits, rather than going for high-priced residential projects with larger initial windfalls.” Very wise words, in my opinion.
The article is very extensive so if you have time and the topic interests you then I encourage you to read the whole thing despite the length: