The real estate recovery will continue to move forward in 2013 but slowly. Global economic turmoil will restrain confidence but overpriced core markets will begin to drive interest in strong secondary markets. Most locations can still not support commercial construction because of the weak tenant demand and employment outlook. Multifamily development remains the only strong sector but is expected to be peak in 2014-2015.
Posts from the ‘Trends’ Category
(1) As the decline changes course it will emerge in demand across gen X, Y and baby boomer generations.
(2) Buyers need what they can afford and what they can finance. Sustainability and energy efficiency is important but buyers are not willing to pay extra – this is the new standard.
(3) Back to the basics before the market become overheated – the basics haven’t changed.
(4) Feasibility of suburban development is questioned in tough economic times but people continue to want yards, good schools and a secure way of life. Urban infill doesn’t work for most production builders. Suburban development is not dead but remote suburbs have lost appeal – closer in locations close to jobs and services will succeed.
(5) Great planning is important in establishing a social infrastructure that will create community.
(6) Inexpensive shifts that positively impact our lives will be the successful breakthroughs. Mini-master planned communities will be 50-100 acres in first and second ring suburbs; they will be 40 year old strip malls and old industrial areas which are close to where things are happening. 20-40 units per acres that still feel relaxed and comfortable; active adult and age-targeted homes will mix into traditional neighborhoods.
(7) Face-to-face conversations and connections are still important. Social media, by itself, is not a tool to sell a community, but rather a way to engage a community and drive lifestyle.
(8) The reality is that millions have damaged credit and potential for financial innovation exists to meet the needs of consumers.
(9) Market uncertainty appears to be transforming the adversarial nature of the builder, developer, and capital relationship to one of collaboration and cooperative alliances, and more creative partnerships are becoming the norm.
(10) New development will not be feasible until distressed lot supply is absorbed.
(11) Successful public/private partnerships will require long developer track records and impeccable credibility.
(12) To secure financing, loans for projects need to be relatively low leverage at 35-40%.
(13) Private equity will be the first to jump back into real estate finance. Banks and institutions will follow reluctantly, but only once a sustained records of growth, in terms of home and land pricing and absorption rates, is established in the market.
(14) We will all be in the business of fixing broken projects for the next few years.
There were a lot of great points made about the changing real estate environment - below are a few which stuck out to me.
Traditional practices and conventions are being challenged more than ever;
The idea of Collaborative Consumption and its impact on real estate - Collaborative Consumption describes the rapid explosion in traditional sharing, bartering, lending, trading, renting, gifting, and swapping reinvented through network technologies on a scale and in ways never possible before...
The WordPress.com stats helper monkeys prepared a 2011 annual report for this blog.
Here’s an excerpt:
A New York City subway train holds 1,200 people. This blog was viewed about 4,600 times in 2011. If it were a NYC subway train, it would take about 4 trips to carry that many people.