According to the Urban Land Institute, the future of real estate is complicated
The Urban Land Institute (ULI) just released its annual Emerging Trends inReal Estate Report for 2019. One word sums up the findings for the coming year and that word is “uncertainty.” Why? Because experts say we’re headed toward a more complex, multi-layered series of overlapping real estate trends 2019 could see. And those trends will leave the industry with unpredictable results.
The report, a joint project of ULI and PricewaterhouseCoopers researchers, provides an outlook on real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues throughout the United States and Canada. Now in its 40th edition, this year’s report cautions that we are headed towards an overall economic slowdown next year. On the positive side, that slowdown could provide new opportunities for buyers and sellers alike.
More than 750 real estate professionals were interviewed for the report. Their opinions on the state of real estate were used to create the overview of real estate trends 2019 might bring. Survey responses, commentary from interviewees, and a deep dive into third-party data led ULI to the conclusion that the future of the real estate industry is, in a word, complex.
Climate of uncertainty
The coming year will be one of significant transformation when it comes to real estate. That’s not so surprising since we began noticing the climate of uncertainty earlier this year. Even though experts predicted the summer of 2018 would be the most competitive housing market in recorded history, last July we began seeing a weakening demand in the housing market. That, in light of years of steady growth and low-interest rates. Interest rate hikes have also caused a cooling of housing prices across the country, including right here in Santa Barbara.
Many of those questioned for the report said the recent cooling down in real estate is a sign of correction. This is especially true in the face of new technology along with generational and demographic changes. Another factor is the rise of new markets. Many survey respondents described the feeling of “coming off a peak.”
Before you get nervous about the future, remember: uncertainty can be positive. A degree of uncertainty is what makes for innovation and creativity. It is the space where our behaviors can make a difference.
Technology wrestles with the real estate market
One of the most far-reaching changes explained in the report is actually rewriting the way real estate professionals do business. That change has to do with the rise of industry-specific technology, startups, and better and more transparent analytics. In many cases, capital is following “fintech,” short for financial tech. This can lead to more efficient, and automated, transactions. That’s why it’s so important you work with a Realtor® who keeps up with technology.
The real estate industry represents 13% of the U.S. GDP. Because of its importance in our country’s financial sector, technology surrounding real estate has always played an important role. Next year will see increasing inroads by tech firms, services, and startups. Those seeking to capture and consolidate this fragmented market include venture capital and tech investors. Some experts predict real estate tech investment may top $5.2 billion by the end of 2018.
For instance, a new Los Angeles-based investment fund named Fifth Wall is connecting the world’s largest owners and operators of real estate with the entrepreneurs and innovators redefining how the world interacts with its physical environment. Called “Built World,” this technology has the potential to transform, optimize, and democratize our physical environment in ways that can help humans thrive.
However, even new technology doesn’t carry the same benefits as working with a professional Realtor. The right real estate agent has contacts, knowledge, and passion to personally find the right buyer for sellers or home for buyers.
Curbing emissions and controlling environmental impact will be important issues over the next decade. That’s why more and more investors and building managers are making green practices a core part of their business. “Real estate has been proactive on sustainability issues for many years,” the report states. “As a matter of self-interest as well as social responsibility, the industry is moving ahead to advance its sustainability performance regardless of the direction of national policy.”
This years’ 2019 Emerging Trends in Real Estate gives both real estate professionals and their customers a lot to consider. If you are considering selling your Santa Barbara home, make sure whoever you work with is familiar with the findings of this report. By working with me to sell your home in Montecito, Hope Ranch or any of Santa Barbara’s upscale communities, you can rest assured you’re working with someone who stays up-to-date on the latest real estate trends, like those in the ULI report. Give me a call at +1 805.886.9378 or email me at Cristal@montecito-estate.com and I’ll happily add your home to my portfolio of fine properties. I’m can also help you find the perfect family home in the area at the same time!