It’s hard to believe that 2019 is already coming to an end. Not only are we preparing to enter a new year, but a whole new decade. I mean seriously, we’ve already completed two full decades of the 2000s? How is this even possible?!
Every year the Urban Land Institute releases their annual Emerging Trends report regarding the upcoming real estate year. As I read through the article, I found some takeaways that I wanted to share with you. Here is what you need to know about the 2020 real estate market.
Could we see a recession?
While recession fears have certainly spooked those expecting the current record-setting economic cycle to eventually correct itself, industry sources consulted for the report believe the housing sector is still in great shape. Confidence is “palpable,” due in large part to the fundamentals. Analysts don’t see the same oversupply or over-leverage issues that caused a panic and set off the Great Recession.
Top ten markets present little surprise
Emerging Trends didn’t redraw the map with its predictions for the top 10 markets for 2020, favoring large and mid-sized metros in the “smile states” (west and east coast, plus the Sun Belt). By and large, the cities on the list have benefited from a combination of tech-driven growth and booming populations: Austin, Raleigh/Durham, Nashville, Charlotte, Boston, Dallas/Fort Worth, Orlando, Atlanta, Los Angeles, and Seattle round out the top 10.
Affordability
Inequality has become a feature, not a bug, of our current housing market. Rents and home prices have skyrocketed, becoming untenable in markets nationwide; there’s no county in the country where a worker clocking in 40 hours at minimum wage can afford a two-bedroom apartment, per the National Low-Income Housing Coalition.
“We are building 90 percent of our housing for 10 percent of our households” said one interviewee.
The trend toward community-oriented development is here to stay
The future of coworking, of shared commercial space, is bright. Coliving, led by companies like Common, is poised for a huge increase in capacity across the country. This year’s Emerging Trends found that collaborative consumption—integrated platforms of products, services, and experiences—is increasingly popular with younger generations favoring sustainability and social interaction. As traditional retail continues to struggle, this type of business, or placemaking effort, can be a big draw for a larger project.
The slow and steady march of technology
Technology in the real estate sector—both smart home devices for residential settings and proptech, which are startups bringing new ideas to the larger real estate business—have been on the verge of a breakout for years. And while the relatively slow adoption of tech in real estate continues, it is starting to make a real impact. In addition to the proliferation of iBuyers and new means to analyze and act on property data, and new tools to digitize the homeselling process. We’re seeing more smart home adoption, especially digital assistants and security cams, and there will be even more so with the rise of 5G.
I would love to help you with any real estate needs or questions you may have. Happy Thanksgiving!
Information for this piece was taken from an article written by Patrick Sisson.