Niche neighborhoods and economic diversity are driving forces behind the strong showing of this year’s top ten U.S. cities, according to Emerging Trends in Real Estate® 2017, recently released by PwC US and the Urban Land Institute (ULI). Austin, Texas wins “Top City,” thanks to its authentic, niche neighborhoods and depth of economic diversity, from manufacturing to education, health care and technology. Construction labor shortages and the rapid spread of digitization throughout the industry are also playing key roles in fueling 2017 real estate trends, along with “Optionality,” the multi-purposing of in-demand spaces.
The outlook includes interviews and survey responses from more than 1,800 leading real estate experts, including investors, fund managers, developers, property companies, lenders, brokers, advisers and consultants.
Top trends for 2017:
- Niche Neighborhoods & Economic Diversity: Market characteristics such as authentic, niche neighborhoods with strong economic diversity are driving growth outside of gateway markets. The attractiveness to both workers and employers alike is supporting real estate growth.
- Labor Shortages: Construction labor shortages are driving up construction costs and stretching out project timelines, directly impacting availability of affordable real estate across all residential sectors.
- “Optionality” – A new driving force landlords can use to protect revenue potential by allowing multiple uses of the same space at different times, and permitting tenants to use only the space they need when they need it. For example, an office by day and a party/event venue by night.
- Digitization & Transparency: The digitization of real estate is revolutionizing the industry by improving accuracy, transaction speed and transparency, which in turn is fueling an “auto-correcting” real estate cycle. Rising property prices slowing transaction volumes while new supply remains under control is holding off the traditional “boom/bust” of previous cycles.
Top cities for 2017:
- Austin, TX
- Dallas/Fort Worth, TX
- Portland, OR
- Seattle, WA
- Los Angeles, CA
- Nashville, TN
- Raleigh/Durham, NC
- Orange County, CA
- Charlotte, NC
- San Francisco, CA
Atlanta and Denver both dropped out of the top 10 market ranking for 2017 but are both still in the top 20.
2017’s top 5 markets to watch and why:
- Columbus – A major university town, Columbus is seeing a surge in entrepreneurial activity.
- Richmond – The “hip factor” of downtown Richmond is on the rise.
- Pittsburgh – Emerging tech and other startups are flocking to Pittsburgh because of the access to talent from nearby universities and a 4% lower-than-the-national-average cost of doing business.
- Charleston – The Charleston economy is hitting on all cylinders with strong demographic growth and expanding technology, manufacturing and transportation industries.
- Salt Lake City – Salt Lake City is benefitting from a unique synergy between financial services and technology firm
Related Stories
Apartments | Jun 4, 2024
Apartment sizes on the rise after decade-long shrinking trend
The average size of new apartments in the U.S. saw substantial growth in 2023, bouncing back to 916 sf after a steep decline the previous year. That is according to a recent RentCafe market insight report released this month.
HVAC | May 28, 2024
Department of Energy unveils resources for deploying heat pumps in commercial buildings
To accelerate adoption of heat pump technology in commercial buildings, the U.S. Department of Energy is offering resources and guidance for stakeholders. DOE aims to help commercial building owners and operators reduce greenhouse gas emissions and operating costs by increasing the adoption of existing and emerging heat pump technologies.
Student Housing | May 28, 2024
Student housing remains strong in May 2024
Although the pace has slowed down this year, student housing preleasing for the 2024–2025 season reached 73.5% in April, 50 basis points year-over-year (YOY).
Mixed-Use | May 22, 2024
Multifamily properties above ground-floor grocers continue to see positive rental premiums
Optimizing land usage is becoming an even bigger priority for developers. In some city centers, many large grocery stores sprawl across valuable land.
Office Buildings | May 20, 2024
10 spaces that are no longer optional to create a great workplace
Amenities are no longer optional. The new role of the office is not only a place to get work done, but to provide a mix of work experiences for employees.
Contractors | May 15, 2024
The average U.S. contractor has 8.4 months worth of construction work in the pipeline, as of April 2024
Associated Builders and Contractors reported that its Construction Backlog Indicator increased to 8.4 months in April, according to an ABC member survey conducted April 22 to May 6. The reading is down 0.5 months from April 2023, but expanded 0.2 months from the prior month.
MFPRO+ News | May 13, 2024
Special multifamily report indicates ‘two supply scenarios’
Could we be headed towards a “period of stagflation?” That's the question Andrew Semmes, Senior Research Analyst, poses in the Matrix May 2024 Multifamily Rent Forecast update.
Adaptive Reuse | May 9, 2024
Hotels now account for over one-third of adaptive reuse projects
For the first time ever, hotel to apartment conversion projects have overtaken office-to-residential conversions.
MFPRO+ News | May 8, 2024
Multifamily rent growth approaches peak levels in April 2024
In its latest multifamily report, Yardi Matrix finds that the national average rent has increased for the second month in a row.
MFPRO+ Special Reports | May 6, 2024
Top 10 trends in affordable housing
Among affordable housing developers today, there’s one commonality tying projects together: uncertainty. AEC firms share their latest insights and philosophies on the future of affordable housing in BD+C's 2023 Multifamily Annual Report.