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A Look into the 2018 Real Estate Market 

A Look into the 2018 Real Estate Market al 

According to the Urban Land Institute, we can expect a relatively smooth ride looking into the 2018 real estate market. Its been anything but slow this year, but the consensus of real estate experts and analysts who were surveyed, there is no sign of a drop-in altitude. Here are a few things to keep an eye on as the New Year begins.

Housing Shortage Offers Big Opportunities: there is no doubt the housing shortage has been a challenge for markets across the U.S. And no segment of the housing market that has as many opportunities for potential home buyers, however there is no scalable solution that currently makes sense. There is a major demand from young adults for more affordable homes – whether it is urban row housing, tract housing, starter homes or affordable rentals – this is untapped gold mine for real estate developers who can figure out how to build affordable homes in the right location with the right amenities.

Is the Economic Cycle Heading for a Crash? According to the regular economic cycle, it might appear that the U.S. economy is due for a course correction, however according to experts cited in the trend reports, the real estate market is headed for a smooth ride, verses a nose-dive crash. Experts point to positive signs such as low unemployment rates, a tightening policy at the Fed and high asset prices in real estate. These trends tell us that investors are more defensive and conservative as the cycle stretches out. By creating more balance, the market may have reached a “new normal” of slow and steady growth.

Office Evolution and Commercial Curation: office designs are morphing into more mixed workshops with technology, create commons and curated, configured spaces that boost productivity. Developers who focus on the market trends for efficiency, coupled with flexibility, green designs and smart office spaces could benefit greatly in 2018.

Gen Z Joins the Workforce: make way Millennials, Generation Z is on your heels and making their mark on trends in both the workplace and the housing market. Gen Z is defined as those born between 1995 and 2001. They are hitting the housing market much like the Millennials did with high debt from college, and demanding a more urban lifestyle. They are also joining the workforce looking for structure and stability; but researchers tell us they are competitive but easily distracted. Gen Z is expected to have the biggest impact on retail and shopping. Their social media nature and “gadgeteria” ethos will put more and more pressure on retailers and retail landlords to create a shopping experience with connectivity that responds to their individual preferences.

Retain Transformation: experts continue to debate the depth of the retail apocalypse, however, there is no denying that retail real estate is facing a transformation based on consumer behavior. The U.S. retail sales continue to report a growth, but some stores are struggling with a decline in foot traffic and a shift in the expectation of the generational shopping experience.

The Urban Land Institute shared five trends shaping the future of retail real estate: fundamental changes in apparel manufacturing, department store deconstruction and obsolescence, changes in consumer demographics and preferences, overall retail industry maturity, and advancements in retail technology including e-commerce. Brick-and-mortar will remain dominant, but investors and landlords will need to consider and adapt to updating their spaces for this fast-moving environment.

What About the Baby Boomers? Initial predictions told us that a mass of baby boomers would heading off to retirement in 2018, however a complicated reality has caused a delay for many. A 2016 survey revealed that 37 percent of baby boomers had less than $50,000 in savings and many have been impacted by the fall out of the Great Recession with loan burdens and lack of financial planning. While the high-end market will still be seeking out urban living with an active retirement life systyle, many will be scrambling to find affordable housing with aging in place options. By 2030, there will be 75.5 million Americans over the age of 65 with a vast diversity in needs, financial situations and lifestyle preferences and the real estate market will have to overcome the challenges that face this huge market.

Secondary Markets Will be in the Spotlight: the secondary markets in the U.S. have outpaced the primary cities as least according to the survey from Urban Land Institute. The reasons are varied from more educated investors, foreign capital growth, and growth in many of these cities seems more sustainable and long-lasting. Seattle has taken the number one spot with Amazon-backed growth, and Salt Lake City at number three, Miami making a huge jump from number twenty-five to number eleven in the ranking.

For more than forty years, the Knipp name has been helping landlords and investors with their real estate development needs, and navigating the commercial real estate market with ease. We invite you to visit us online at and view our online portfolio.

Whether you are looking to renovate your office space or break ground on a commercial real estate project, our team of experienced experts are ready to help you with all your construction and real estate development needs. We look forward to hearing from you soon!

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