While it may be difficult to accurately predict the future of real estate, it is safe to say that certain trends are emerging. —
"Anyone who gives predictions won't last long as a futurist. Among the occupational hazards of this work includes the fact that any statement made about the future may, in hindsight, appear to be obvious, wrong, or worse yet, obviously wrong," says James H. Lee, founder of StratFI.
Nonetheless, those who look ahead see a few trends in particular that may influence how and where we as a society live: One is urbanization, another is smaller living spaces, and yet another is the free spirit existence of the millennial generation.
Millennial Influence on Real Estate
The post-consumer generation only expects to stay with each job for three years, so making long-term financial decisions doesn’t come easily. In their uncertainty, they are choosing freedom and flexibility in their work space and their living arrangements. Both preferences impact the real estate industry.
Millennials prefer flexible offices with open spaces, featuring shared resources for a diverse community of workers. As for living arrangements, there is a shift towards co-living apartments with private bedrooms and shared bathrooms and common areas. Another trend is access to a year-round time share space with a flat rate for monthly living, and multiple locations to choose from, and move to with just a week’s notice.
A Return to City Living (Urbanization)
There is a growing trend now to more urban living; a trend that is expected to continue through 2050. Urban environments appeal to residents of all economic means. Residents with less income can use public transportation and have access to community services. More affluent residents can take advantage of the arts and a large business community in a concentrated area. Since urban environments don’t have much space to offer, there will likely be a growing trend of smaller families living in small homes in any given city.
Urban real estate will have to become more efficient to serve the needs of growing populations within small spaces. Some cities are expected to embrace “going green” with rooftop gardens and vertical farms.
Technological changes facilitated by an increase city living could include:
• More shared cars and shared rides (think Uber) and a decrease in car ownership
• Wi-Fi power instead of cable and landlines
• More homes using OLEDS: Organic Light Emitting Diodes as “smart walls” and windows
Tiny Homes with Multiple Uses
Finally, a segment of the population is building tiny homes to serve as flexible housing. These can be used as primary residences, a rental income unit, guest suite, or home office.
These are just a few real estate trends and possibilities to be aware of as the future unfolds. The success of the real estate industry depends on adapting to the needs of all consumers, whatever they may be and however they may change.
For more information on these emerging trends see http://www.stratfi.com/blog/87-real-estate-disappers.html
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