Monthly Archive: January 2016

2015 Top 10 Real Estate Trends

Real estate trend is defined as any consistent pattern which includes changes that affect the general direction of real estate industry. These changes are results of varying mortgage rates, economic factors, consumer speculations and other possible reasons.

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Here are the top 10 real estate trends 2015:

1.    Urban Core Housing in 18-Hour Cities – The trend is spreading like fire across the country. Urban areas all over the United States are competing again to bring more commercial structures like apartments, shopping malls, offices, shops, bars, and restaurants to accommodate the needs of people who like work and shop before going home. Downtown areas are bustling with activities during evenings in cities like Charlotte, Raleigh-Durham, Denver, Charleston, Greenville, Portland, Atlanta and Brooklyn, New York. Emerging housing projects encourage these cities to strengthen their commercial districts to become perfect places to work, live and find entertainment. Transformation makes them ideal areas to combine housing, dining, retailing, marketing and walking to offices or vice-versa.

2.    Millennial Homebuyers Choose to Rent – The millennial generation is children born from 1982 to 2002. They are about 81 million in numbers and will replace Baby boomers when they retire. Millennial generation is apt with technology, multi-tasker, career-oriented and love the diverse environment. They are the prospective home buyers but believe in taking time before deciding to have one. They just love to the city life, and when choosing permanent homes, they prefer to combine urban with suburban lifestyle in areas which offers convenience, safety and fun.

3.    Shortage of Labor Market – There is an increasing decline in numbers of construction workers that affects real estate industry. Seasoned workers are now retiring, and there is a strong need to fill up vacancies to keep up with the demand for construction.

4.    Lesser demand for Big Spaces- As the influence of modern technology intensifies, there is a shrinking need for big places to work or live. Technology brings changes in space use and locations. Millennial generation prefers to borrow rather than buy. They secure short-term rentals for homes or share them with friends. They also share spaces for office needs.

5.    The risk of events – The trend of seeing investors from core to opportunistic is now a classic truth. In 2015, opportunistic investment reemerges in real estate market. Positive expectations of aggressive and conservative investors are being influenced with the release of National Council of Real Estate Investment Fiduciaries and National Association of Real Estate Investments that there would be 60-90 returns by the year 2020.

6.    Greater global investment opportunities – One of top 10 real estate trends 2015 is the effect of geopolitical risks, natural disasters and international unrest to foreign investors. It will bring more investors to increase their efforts to expand their market in the US.

7.    The emergence of real estate players in the industry – The influence of new Defined Contribution Real Estate Council is one of the positive factors that are changing the real estate industry. The prime council tasks are helping their sponsors get higher investment returns and assisting retirees to take advantage of investment opportunities. The council has a combined capital amounting to $12.t trillion.

8.    Performance matters – Factors such as performance and efficiency are the most important concerns of real estate investors. They expect “more quality services for less money investment”. Bidding intensifies as more real estate companies compete to prove their efficiency and effectiveness to carry out the expectations of investors.

9.    Lack of essential structures and infrastructures – One of the main concerns of real estate buyers now is the lack of health care facilities and educational buildings in areas that they consider as good places to invest. Places that need road and bridges renovations are also being ignored by most investors which hurt the real estate industry. The lack of physical facilities that brings ease of commutation can affect the business.

10.    Keep the balance – Do not forget the lessons of the past. It is necessary to balance optimism to protect the industry from another housing bubble. The gradual recovery of the economy still poses a risk to real estate industry, so it is important to continue being on the safe side while keeping an optimistic effort to keep real estate alive.