The rebounding real estate market is expected to maintain its upward trend in 2016 as it continues recovering from the crash of 2007. That’s according to the Urban Land Institute’s “2016 Emerging Trends in Real Estate” report, which characterizes the outlook for the next 12 months as rosy. Urban Land Institute (ULI) says there are several factors expected to lead the growth in real estate this year, including:
— So-Called “Second Tier Cities” Taking Off – Locales such as Austin, Nashville, San Jose, Portland and Raleigh-Durham benefit from their lower costs of living, an increasing ease of staying connected to larger city’s “main hubs” and a larger upside from affordable and available investment opportunities. In addition, these cities are seen by investors as having a certain “hipness” factor that makes them more attractive.
— Millennials Move To the Suburbs – While Millennials have traditionally been branded as a generation obsessed with urban living, they – like their parents and grandparents – want homes and good schools for their children. And, even though many have put off having children, studies suggest a larger number will soon become parents and quickly fuel a suburban boom. This is especially true in suburban areas surrounding cities that have seen post-recession job growth, such as Hartford, Milwaukee and Pittsburgh.
— New Housing Options and Ideas – With the shrinkage in home ownership over the past eight years, housing affordability is an increasingly important issue, and the ULI report is blunt in its conclusions:
“Developing improved housing options for everyone, however, is passing from the realm of ‘nice to do’ to ‘must do.”
Business owners in all sectors of the economy should study and respond to the shifting demographics of home ownership mentioned in the ULI report and what’s ahead as Baby Boomers retire and Millennials become the dominant economic market force in the next few years.