Top 10 predictions for real estate investors in 2016
Experts agree that the commercial real estate market will be driven by start-ups and small firms in 2016, as growing companies with under 50 employees are outpacing the larger ones. The conventional focus on the big cities and influential employers is going through a drastic change as small businesses make their way into the market. This emerging trend is disrupting the system, although that’s not necessarily a bad thing. Here are 10 predictions the real estate market might be dealing with in 2016.
- Potential investment return in “18-hour cities”
“18-hour cities” are increasing in popularity, and they’re slowly becoming more “hip”. Denver, San Diego, Austin, and San Antonio are growing in popularity. The industry might even see an investment return potential as these markets offer a variety of opportunities to buyers and investors. That’s because they offer a range of amenities on a larger urban setting at a convenient price.
- Suburbs are not dead
Experts in the real estate market claim that the suburb is not dead. There has been a fear that millennial are abandoning suburban-living, although, according to recent reports, those millennial are turning their attention on marriage and family; this means such major steps will compel them to embrace the suburb and not abandon it.
- Growing office sector
As employment rates improve the office industry is seeing notable growth. Companies are revamping the traditional office space in the hopes of attracting top talent and adapting to new working styles. Co-working spaces for instance, are becoming an extremely important part of the real estate industry.
- Optional housing
Even though rentals still have the upper hand, there will be a continuous housing demand across the residential sector. That additional buyer influx will come with increasing demand for alternative housing options, like co-housing and micro-housing.
- Fewer parking lots
Studies referenced by the Department of Transportation & American Auto Association highlight that mileage percentage traveled by people in their 30s is down by 23%. Furthermore, the percentage of seniors driving between 1996 and 2010 has also dropped to 73%. That being said, as fewer and fewer people drive, the existing parking spaces will probably make room for potential housing lots.
- Innovations in infrastructure
The traditional approach to the current infrastructure is disheartening. There has been a continuous attempt to fix the infrastructure, and it looks like in 2016 experts are finally starting to ditch old-fashioned methods for more original and creative ideas.
- Urban land for food production
Many cities feature residents with stagnant incomes. Investors should take advantage of that aspect, and take into account people’s desire and need for fresh food. Using the urban land for food production might become an actual fact in 2016. This trend is just getting started, and real estate professionals should pay more attention to the use of city space to produce fresh food as this is a coming wave of ingenious uses of land.
- The great potential of mergers
Both acquisitions and mergers have grown tremendously in the recent years. Companies are looking to expand, and some have noticed that start-ups do have great potential. A lot of small-sized companies are choosing to specialize and merge with the bigger names in their industries. Such projects will create more jobs, and more jobs will help investors convince people to buy homes.
- Capital availability
There has been a 24.6% increase in capital flow in the US real estate market as of June. The figure could mean a steady degree of capital availability, which might help real estate professionals figure out where it could benefit the most. The new capital might help additional markets, particularly “18-hour cities”, redevelopment and renovation of older spaces, alternative assets, and more.
- Renting still dominates the market
Real estate investors predict that the renting market will dominate the housing market in 2016. But then again, nobody can stop you from opting for an investment property in Turkey if that’s what you need. It’s definitely worth considering international buying and investing, too. Before moving forward with this idea, you might want to consult with an experienced realtor first.