While Commercial Real Estate Falters, The Single-Family Market Is Booming Amid Pandemic, Report Says
Raleigh North Carolina is among the top ten highest rated markets “for overall real estate.” … [+]
The Urban Land Institute and PwC’s latest forecast of property trends can be found here. ULI and PwC’s 2021 Emerging Trends in Real Estate offer deep insights and insights into all sectors of the US and Canadian real estate market. It is not surprising that retail, office, multi-family and commercial markets have felt the far-reaching negative effects of the pandemic.
Conversely, the housing sector is on fire across the country. Brokers and agents agree they haven’t seen a better year. “In my 16 years in the real estate business, this has been the busiest I’ve ever seen,” notes Carl Hawthorne, associate broker at Atlanta Communities in Atlanta, Georgia. “There are four to five offers for a house once it’s on the market.”
From the Super Sunbelt cities of Atlanta, Dallas / Ft. Worth, Houston to Phoenix, San Antonio and Tampa / St. Petersburg, the perfect storm of historically low interest rates, sustained demand for single-family homes in suburban areas and families realizing their current homes are no longer working has fueled the market. “The data shows that the single-family market is still on fire,” said Anita Kramer, one of the authors of the forecasts and senior vice president of the ULI Center for Capital Markets and Real Estate.
An entire section of the report, entitled “The Great American Move,” explains market dynamics. “A major trend in the single-family home market emerging from the COVID-19 pandemic is” The Great American Move. “People (and businesses) are moving in a variety of ways – to different regions, from denser cities to suburbs, from apartment to home and, for some, a “home” to live with family members. There is no better evidence of the Great American Move than the booming single-family home markets – especially in the cheaper areas of the United States. Some observers argue that major events like a pandemic do not create new trends but accelerate existing ones. This seems to be the case with housing today. The “move” occurred before the pandemic, which was already triggered by geographic, demographic and consumer shifts in the US. “
Like her grandparents, who moved to the country’s newly built suburbs, the report said, “young and growing families may be more motivated than ever to buy a new home. This family segment will be a boon to the nearly 80 percent share of household growth that we expect to be captured by the suburbs (or surban ™ markets) in the coming years, bringing with it the desire for more urban convenience . “
The Emerging Trends groups the markets into four main categories. This includes Magnets, The Establishments, Niche and Backbone Markets. Magnets include the Super Sun Belt, 18 Hour Cities, and Sunshine State subgroups.
One category to watch out for is 18-hour cities. While 18-hour cities aren’t new to the group, they have a solid outlook. These cities include Austin, Charlotte, Denver, Minneapolis, Nashville, Portland, Raleigh / Durham, Salt Lake City, San Diego, and Seattle. “What draws people and businesses to these medium-sized cities is a good central core with lower living and business costs,” Kramer notes.
Strong employment opportunities attract young professionals and families to these cities. The report points to the underlying economies of these cities that will add to their popularity with developers and investors in 2021. This is backed up by the fact that Austin, Charlotte, Nashville, Raleigh / Durham, and Salt Lake City are among the top ten most rated markets for “general real estate prospects.”
In contrast to the higher priced establishment group of cities like Boston, Chicago, Los Angeles, Philadelphia, and New York (Brooklyn and Manhattan), these 18-hour cities offer more affordable living that attract young professionals and families.
If we are still in a pandemic in 2021 and there is hope in sight, it will be interesting to watch the real estate markets in these 18-hour cities.