According to Emerging Trends in Real Estate®, a publication from PwC, there are trends emerging in 2017.
The global financial crisis violently that disrupted markets around the world including the real estate markets in the United States decimated the real estate pricing. Volume was way down, however it has rebounded, but development is still below historical numbers for most types of property. As of August 2016, this business cycle we are in is one of the longest in U.S. history, longer than the average 58-month upturns since World War II.
While the U.S. macroeconomic data suggests the market is overheated, real gross domestic product (GDP) growth has settled in at about 2 percent per year, and job growth has been running at about a 1.7 percent pace. Also, what does keep this real estate cycle continuing is the problem of securing construction financing. With that, there is not an oversupply of inventory that typically will signal a downturn.
The type of commercial properties are changing. Many properties are not just for one type of user. Optionality is becoming a key objective when developing property. The user space is able to be adjusted by need and in terms of size or location. People are now selecting spaces for contract workers, sole proprietors, or small firms that can share space. Some spaces are being created as either office or living space.
The millennial generation is one who wants options. They move, they take jobs and not careers. They are not centered on planting themselves in one location. Optionality is key to their lifestyle and the market is changing to meet their needs.
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