2018 is here and with the dawn of the new year comes goals, aspirations, and predictions for the months to come. Real estate predictions are generally some of the hottest topics across the web this time of year, and 2018 is no different. Today, we’ve rounded up some of the top news for 2018 real estate. We’re covering everything from CRE predictions and residential real estate predictions to real estate investing and even a pinch of financial news. Grab your coffee (or green juice if you’re into resolutions), and take a look at what’s in store for 2018.
The Word of the Year According to Deloitte: Adapt
As technology innovations happen, so do innovations in industries well beyond the grasp of the tech space. Real estate is just as susceptible to the rapid technology changes, and as such, should be prepared to face them head-on. Deloitte points to Manhattan’s $25 billion mixed-use redevelopments, Hudson Yards. Project highlights include connectivity, sustainability, and integrated neighborhoods that feature both CRE and residential buildings complete with public parks and other spaces, too. Forward-looking and forward-thinking developments, like Hudson Yards, are exactly where the market, healmed by millennials, is headed. Deloitte encourages RE companies to consider themes like business acceleration, capital option alternatives, productivity augmentation, and people advancement for 2018. This year will be a nod towards the future and a glimpse at who can adapt to an ever-changing marketplace.
In 2018, RE companies may have to be dexterous risk takers to embrace change and adapt for the future. @MountainSeed
CRE Uses Expanding Economy Tailwinds to Soar into 2018
With tax reform discussions leaning favorably towards commercial investments, commercial leasing is expected to continue on a positive trend. Tenant demand kept its stronghold in the 5,000 square feet and below segment, accounting for 82% of activity while demand for under 2,500 and 2,500 – 4,999 also increased. Despite retail worries, and with the retail sector being the sole exception, vacancy rates also continued to decline. As indicated in Q3, retail vacancies rose to due to national department stores announcing further closings.
The Generation Z Effect is Coming
Move over, millennials, here comes Generation Z. Marked somewhere between the years 1995 and 2001, Generation Z is making their mark on the workforce, and therefore, the real estate market. Experts say that in order for traditional brick-and-mortar retail spaces to survive, owners need to capitalize on Generation Z’s need for shareable shopping experiences. Space design and even product decisions will certainly be impacted. As for those collaborative workspaces hallmarked by Millennials? Generation Z seems to be looking for structure with a return to offices and personal spaces. Poise to further impact the housing market like their Millennial predecessors, Generation Z seeks those lower cost fixer-upper homes.
Don’t Rule-out Millennial Home Buyers
While 2017 proved to be a great year in the housing market, it didn’t quite meet expectations as far as a normalized market goes. First time home buyers, made-up of Millennials, came in at 34% just under the 40% needed to be considered normal. Interestingly, experts note that while Millennials are in fact continuing to purchase homes, they are embracing their savvy side and seeking ownership in less expensive markets. Places like North Dakota, Ohio, and Maryland are attracting home buyers concerned about affordability. Predictions for 2018? As Millennials get more and more stable in their careers, we’ll see a shift towards purchasing in traditionally expensive markets.
First time home buyers, made-up of millennials, came in at 34% just under the 40% needed to be considered a normalized market. @MountainSeed
Home Ownership Increases in Both Existing and New Homes
If you haven’t noticed yet, let’s make one thing abundantly clear: Millennials are driving much of the housing market. Analysts suggest Millennials will further increase their share of market homeownership this year. While experts indicate existing home sales will increase slightly, new home sales will see the most significant increase, a result of fighting against the low levels of available affordable housing. As home prices steadily rise (to a predicted 3.2%), home sales are expected to pick up, especially among the younger generation. Also on the horizon, a stable homeownership rate of 63.9% after having hit bottom in the second quarter of 2016.
The Rise of the Urban Suburb
Gone are the desires to own the McMansions of the Baby Boomers. Experts agree that the new trend will be urban suburbs, densely populated neighborhoods outside of the city with walkable amenities and great school systems. Pushed for by, unsurprisingly, Millennials, these suburb/city hybrid neighborhoods provide the urban lifestyle with suburban comfortability. Below, a list of Urban Suburbs showcases the city’s neighborhoods’ walk score (a measure that shows proximity to urban amenities like restaurants, parks, schools, and grocery stores), school rating, and YOY change in sales price.
Futuristic Banking Gets Even More Personal
As U.S. News so poignantly points out, much of today’s banking consumers do not remember a time without being able to transfer funds from the comfort of their homes, deposit checks from their smartphones, or check their balances online. Simple, technology-based banking has been a part of our culture for years. Now, we’re going to see even more futuristic advances. DIY fraud protection, complete with a credit card on and off switch, will enable consumers to be in control of their fraud fate at all times. Credit cards and smartphones will also work in tandem to alleviate fraud. Experts predict it will become commonplace for your smartphone to know your credit card’s location to help restrict fraudulent out of state or country charges. Between devices syncing smartly and withdrawing funds requiring a retina scan, the future of banking might just be here.
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