5 real estate trends to watch for in 2016

Blog Post

We all look for things in the real estate market that lead us to see trends. With that in mind, here are five trends to watch for in 2016.

Trend #1: Class B multi-family options will outshine Class A properties

The rents in Class A properties in urban areas keep rising and rising, and in some cases, outpacing what is realistic. I think in 2016, we will see the millennials and the older (empty-nester) generation looking more and more at existing Class B properties. Class B properties have a higher vacancy rate and provide more options for the cost-conscious renter. They may not be as shiny and sexy, but they provide a more reasonable option for a large section of the renting community.

Trend #2: The 18-hour city is emerging across the country

No longer is it just NYC, Chicago, LA and the other top 10 markets in the country that are becoming 18-hour cities. Markets like Cleveland, Columbus, Charlotte, Detroit, etc… are enjoying a cultural renaissance. As a result, the multi-family, retail, and hospitality sectors will need to adjust to this reality in the location and operation of their products in these urban settings.

Trend #3: Physical activity in the urban setting

Creating new physical fitness concepts will be important in the urban markets. Not just your typical gym, but things like indoor climbing, spinning, go-karting, and swimming are activities that the urban dweller wants close proximity to. Look for mixed-use retail and urban-setting warehouse facilities to shine in this space.

Trend #4: High-tech stalking enters the residential market

For awhile now, once you entered a shopping center or mall, your smartphone can and does receive certain messages telling you about different sales and other things going on. This is now translating to the residential real estate market. A buyer driving through a particular neighborhood can, with the correct mobile app, receive detailed information from a broker about a home and the neighborhood (i.e schools, amenities, recreation).

Trend #5: Urban warehouse facilities will shine as a result of the ecommerce boom

As Amazon and other on-line retailers compete for faster and faster delivery options (even within hours of ordering, or same-day in certain markets), the “last-mile” or final leg of delivery have become very important. Therefore, you will see increasing demand for last-mile warehouses that can facilitate same-day and even next-hour delivery. Because of this, the industrial/warehouse market is poised to remain strong in 2016.

These are just a few trends to keep an eye on in the 2016 real estate market.

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