2014: Top Ten predictions for US real estate

real_estate_trends_2014The American real estate market has seen some dramatic highs and lows in the past few years, so what can we expect in 2014? Take a look at our E&V summary of the ten trends to look out for next year.

1. Although traditionally the ‘Big Six’ – New York City, San Francisco, Los Angeles, Washington D.C., Boston and Chicago – have ruled supreme over the investment market, their growth may now be slowing down as escalating prices exclude younger buyers. However, the attraction of living and working in these cities ensures that they will still remain desirable among investors who can afford high value properties.

2. Second-tier cities are the ones to watch in 2014, due to an anticipated increase in both debt and equity capital. In 2011, the Urban Land Institute’s survey of Emerging Trends in Real Estate named New York and Washington D.C. as the only two cities still offering good prospects for investors and developers. For 2014, that list has expanded to include San Jose, Seattle, Miami and Portland, while Washington D.C. is no longer on it.

3. There has been a resurgence in multigenerational housing, mainly due to a combination of high unemployment rates and heavy student loans preventing 18-25-year-olds from moving out of the family home. However, this trend isn’t expected to last much longer, and it’s estimated that the supply of specifically designed multi-family housing may already outstrip demand.

4. San Francisco is still the top-ranked market for American real estate in 2014, with the Emerging Trends report placing it first for a second year in a row. The city is described as a “solid buy” for all property types and remains a highly attractive location for young professionals and families alike.

5. San Jose ranks third for the second consecutive year, buoyed by the career prospects and higher salaries offered by the city’s flourishing technology industry.

6. The fast-growing market in Seattle provides further evidence of the positive growth generated by the presence of successful technology companies. As the home of the Amazon Headquarters as well as well-known online companies like Getty Images, Seattle is expected to be one of the most exciting housing markets of 2014.

7. The slow development of the job market is still affecting real estate, but things are looking up. The strength of the economy in many Texan and Bay Area cities has already spurred on strong housing recoveries, and cities that can tackle unemployment are likely to see similar results.

8. Growth in the condominium market hasn’t lived up to expectations, popularising a new “dual-track” option in which developers construct rental buildings with a view to transforming them into condos when the market improves.

9. Despite numerous reports suggesting that ‘Generation Y’ lacks the motivation or financial security to invest in property, this demographic is dictating many of the emerging market trends, including increased migration to cities, friends teaming up to become homeowners and an emphasis on convenient locations rather than size.

10. The trend even filters down to the suburbs, with areas that have good access to public transportation and local amenities predicted to be the most likely to experience a surge of interest from developers and investors alike in 2014.

For more expert information on successfully navigating this fast-changing property market, just visit the Engel & Völkers USA website.

Posted in Properties.