An international organization of high profile property professionals, The Counselors of Real Estate® (CRE), recently published a report detailing the most pressing trends and issues affecting real estate. The “Top Ten Issues Affecting Real Estate™ 2018-2019” highlights five short-term and five long-term national and global topics that are having a direct impact on the real estate market. In a quick summary, we wanted to share the issues they thought were most pressing.
The top five short-term issues The Counselors of Real Estate® highlighted in their report were as follows: Lending & Finance, Political Climate, Home Prices, Demographics, and Online Retail. The first, “Lending & Finance,” points to the long-awaited gradual increase of interest rates. CRE reports that “historically, this has been a powerful signal of market expectations of an economic down cycle,” which has many buyers feeling as though the frenzied market is too unstable to buy. However, the CRE believes that while it may slow some deals there are no serious immediate affects. Low unemployment rates and the strong economy are the answers most point to when asked why past and forecasted interest rate hikes are happening after years of record lows.
The second item on the list, “Political Climate,” is another topic that heavily affects the market because of the direct and indirect impact on policy. Certain bills and tax acts that could boost or deflate the industry and foreign spending have been at the forefront of the market news. The third issue on the list has also been a highly-discussed topic across the nation in the past year. “Home Prices” have been an increasing issue in cities like Seattle. “Affordability has been stifled by high demand amidst anemic inventory…” states the Realogics Sotheby’s International Realty blog. Fortunately, in Seattle, we’ve seen a recent uptick in inventory and this trend will definitely be worth watching in our neck of the woods.
The fourth issue, “Demographics”, is an interesting topic to be included as the market is now being impacted by four distinct age groups: the Millennial generation, Baby Boomers, Gen X, and Gen Z. CRE states, “some of the biggest impacts will be the way these generations approach workspaces, where companies are located, and the type of homes these evolving groups desire. The fifth and final, short-term issue highlighted in the report is “Online Retail.” The online market grossed $123.7 billion in the first quarter of 2018 alone. The shifting landscape of retail mixing with online (Amazon’s acquisition of Whole Foods) will contribute to a shift in the warehouse and retail real estate.
To read the full report and learn the long-term issues highlighted by CRE click here: Top Ten Issues Affecting Real Estate™ 2018-2019
To read the RSIR blog highlighting the report click here: The Counselors of Real Estate® Release the 2018-2019 Real Estate Forecast & Trends Report