Recently, Urban Land Institute invited a panel of guest speakers to present their predictions for the 2018 national real estate market. The webinar, “Extra innings or Doubleheader for Real Estate 2018? What to Expect for CRE and the Economy,” offered insight into key trends for the year ahead. Here are our top three takeaways.
The industrial sector is on fire
Both the retail and high-end rental sectors have softened in the past few years, investors have identified industrial warehouse developments as a more reliable investment opportunity. With the prominence of e-commerce giants like Amazon, the need for these spaces will only become more pressing in the future.
Development will continue to spread outside major cities
As a result of the skyrocketing costs of living and office rental prices in urban cores that has taken place over the past few years, commercial and residential growth has begun to spread to secondary locations on the outskirts of major cities. As growth expands out of these urban core areas into nearby suburbs, it will likely present an opportunity for investment and growth out of top-tier markets, encouraging competition and cultivating innovation in non-traditional markets.
Economic success will continue to drive investor interest
The U.S. economy’s current strength is making the national real estate market more enticing for investors. The Federal Reserve is beginning to roll back the economic safeguards installed after the recession, which makes investors eager to act on their interests in specific markets. This, in combination with strong stock market performance and gains in employment nation-wide, makes the current environment profitable for investors.
Boston’s real estate environment is one of the most competitive in the country due to its highly-educated population, proximity to some of the top colleges, and increased density of technology and life science companies. 2018 has only just begun, and with more policy changes in the pipeline, at least three interest rate increases and projected nation-wide construction cost increases, we will be interested to see how this all impacts our local real estate market.