Unlike previous reports and previous cycles, we are seeing sustained growth. ~ Mitch Roschelle, partner, U.S. real estate advisory practice leader, PwC
Minneapolis, Twin Cities Minnesota (PRWEB) October 31, 2014
Emerging 2015 Trends in real estate are already evident in the Twin Cities housing market, leading predictions found in PricewaterhouseCoopers and the Urban Land Institute release of The Top 10 real estate trends for 2015. Homebuilders in the Twin Cities acutely realize that the recent home price appreciation rate has outstripped incomes and are preparing for sustained growth in 2014.
"Twin Cities Residential real estate markets have remained strong overall in 2014, regardless of a few headwinds. The Top 10 real estate trends for 2015, according to PwC’s Emerging Trends in Real Estate forecast, show the Twin Cities housing market has already arrived there," says Jenna Thuening, owner of Home Destination.
The annual release indicates what trends to expect next. Real estate demographics, labor force supply, prime neighborhood preferences, and homebuyer preferences and trends discerned by studying consumer behaviors comprise housings most reliable indicators.
THE 10 TOP TRENDS IN REAL ESTATE for 2015 as interpreted by Home Destination from the Emerging Trends in Real Estate® report:
1.) Urban Core Housing in “18-Hour Cities”
Downtowns all over the U.S are expected to press forward with more apartments, shops, eateries, and offices on city blocks as buyer demand indicates people likely to walk to work and shop in route home. Downtown Minneapolis is following those metros spotted as the high trending in this direction: Raleigh-Durham, NC; Charlotte, NC; Denver; Portland, OR; Brooklyn, NY; and Atlanta. The impact of distributive technological advancements shows up strong in urban cores.
2.) Prospective Millennial Homebuyers Opt to Rent Longer
Millennials generation home buyers are not rushing to buy a home unless they feel ready, although most want to become homeowners in the future. Real estate agent insights gleaned in the survey expect it will be 2020 or later before today’s cluster of Millennials opt to either continue as city dwellers or move to outlaying neighborhoods. The authors’ feel it could teeter-totter either way. “Painting [Millennials] with too broad a brush will lead to misplaced expectations—as it has with the baby boomers,” who are moving to downtown Minneapolis more frequently versus a more southern climate. “One size will not fit all Millennials.”
3. Too Few Construction Workers May Restrict Housing Market Growth
Home builders have faced new challenges this year due to intense labor shortages, and predictions new shortages will sweep other corners of the job market in 2015. The report remarks that most Millennials between the ages of 18 to 33 have already integrated into the work force. Simultaneously, many seasoned construction workers are near retirement. Builders may be even more challenged to keep up with the demand for new homes without sufficient numbers of younger worker to fill vacated positions. As 2014 has already proven, when inventory levels drop, home prices, and market advantages may flip from homebuyer to seller.
4.) Shrinking Size of Residential and Commercial Real Estate Needs
With the consumer strength the Millennial generation has going into 2015, their pulse reading that shows they prefer borrowing over buying. Millennials are switching things up and it is raising eyebrows. They are swapping homes for vacation or securing short-term rentals and piggy-backing with friends and family over checking into hotels. The report believes the trend will continue and carry its influence into office sharing and neighborhood development.
5.) Real Estate Will Consist of Less-of-the-Unexpected
The future of residential real estate, according to interviewees, may be more likeable by those weary of the recent housing roller coaster rides. “Remarkably, housing seems to be putting the excesses of the bubble and the ensuing collapse behind it” while “returning to the classic principles of supply and demand,” the report says.
6.) Greater Global Influence In Real Estate
The trend of opportunistic international investors will be distinctly sharper in 2015 - a year when foreign investors may “be the best prospect for increasing investment volume in 2015.” Interviewees are paying more attention to the impact of geopolitical risks, global unrest, and natural disasters. This may prompt international investors to expand their ingrained tradition of investing wealth in the U.S..
7.) New Players in the Real Estate Arena
Attention is drawn to the new Defined Contribution Real Estate Council which helps plan sponsors and their participants achieve higher investment success through the use of institutional quality real estate. "With a combined $12.6 trillion in capital, individual retirement account (IRA) and defined contribution (DC) funds" the hope is retirees will identify and taking advantage of investment opportunities in high-quality commercial property for a mixed-asset portfolio.
8.) Higher Intensity around Real Estate Performance
For the broad sweep of publicly traded building companies and real estate corporations, the study reveals that efficiency and performance will become greater drivers as investors “want more services for less money” and as the biding becomes more intense. “The drive for efficiency and effectiveness in both service delivery and cost will filter from investor expectations down to the service providers,” it states.
9.) Lack of City Upgrades Could Hurt Real Estate
The report covers spending on bridges and roads and the lack of spending on educational buildings and health care facilities. It calls for the U.S to take a sober look at why it has dropped by one-third. Interviewees urge that the foundation of our commerce cannot be left eroding around us. If such investments don’t pick up it could be “painful” for real estate. Investors and youthful Millennials may avoid locations whose roads are inadequate or cities dragging in communication technology. “Real estate depends upon ease of commutation," the report concludes.
10.) Balancing Excessive Optimism to Prevent another Housing Bubble
Real estate professionals, investors, and all public sectors influenced by housing trends are reminded to not “forget the hard-learned lessons of the recent past.” Many factors must be kept in balance to protect a subduing housing bubble. Efforts should be strident to ensure positive housing trends outstrip the negatives. The report states, “Homebuilders — and their lenders — clearly recognize that the recent price recovery in housing has outstripped incomes.”
"The Twin Cities housing market has proved up in 2014 and is positioned competitively among similar metro of size," adds Thuening. "We miss some of the high swings and low and that has contributed to a market advantage. Investors and home buyers like to see steady progress."
About Home Destination - Twin Cities Real Estate:
Home Destination offers a loyal and committed real estate professional service that personally handles all of the details of selling or purchasing homes in Eden Prairie, Minnesota. Highly regarded by peers as a Minneapolis metro expert for over 15 years, gain a skilled representative as guide to make the best possible housing decisions. Helping all home buyer types, from individuals seeking to buy their first home to individuals moving-up to a luxury home, Jenna Thuening has the real estate experience and acumen buyers and sellers benefit from.