Niche neighborhoods and economic diversity are driving forces behind the strong showing of this year’s top ten U.S. cities, according to Emerging Trends in Real Estate® 2017, recently released by PwC US and the Urban Land Institute (ULI). Austin, Texas wins “Top City,” thanks to its authentic, niche neighborhoods and depth of economic diversity, from manufacturing to education, health care and technology. Construction labor shortages and the rapid spread of digitization throughout the industry are also playing key roles in fueling 2017 real estate trends, along with “Optionality,” the multi-purposing of in-demand spaces.
The outlook includes interviews and survey responses from more than 1,800 leading real estate experts, including investors, fund managers, developers, property companies, lenders, brokers, advisers and consultants.
Top trends for 2017:
- Niche Neighborhoods & Economic Diversity: Market characteristics such as authentic, niche neighborhoods with strong economic diversity are driving growth outside of gateway markets. The attractiveness to both workers and employers alike is supporting real estate growth.
- Labor Shortages: Construction labor shortages are driving up construction costs and stretching out project timelines, directly impacting availability of affordable real estate across all residential sectors.
- “Optionality” – A new driving force landlords can use to protect revenue potential by allowing multiple uses of the same space at different times, and permitting tenants to use only the space they need when they need it. For example, an office by day and a party/event venue by night.
- Digitization & Transparency: The digitization of real estate is revolutionizing the industry by improving accuracy, transaction speed and transparency, which in turn is fueling an “auto-correcting” real estate cycle. Rising property prices slowing transaction volumes while new supply remains under control is holding off the traditional “boom/bust” of previous cycles.
Top cities for 2017:
- Austin, TX
- Dallas/Fort Worth, TX
- Portland, OR
- Seattle, WA
- Los Angeles, CA
- Nashville, TN
- Raleigh/Durham, NC
- Orange County, CA
- Charlotte, NC
- San Francisco, CA
Atlanta and Denver both dropped out of the top 10 market ranking for 2017 but are both still in the top 20.
2017’s top 5 markets to watch and why:
- Columbus – A major university town, Columbus is seeing a surge in entrepreneurial activity.
- Richmond – The “hip factor” of downtown Richmond is on the rise.
- Pittsburgh – Emerging tech and other startups are flocking to Pittsburgh because of the access to talent from nearby universities and a 4% lower-than-the-national-average cost of doing business.
- Charleston – The Charleston economy is hitting on all cylinders with strong demographic growth and expanding technology, manufacturing and transportation industries.
- Salt Lake City – Salt Lake City is benefitting from a unique synergy between financial services and technology firm
Related Stories
Office Buildings | Feb 9, 2023
Post-Covid Manhattan office market rebound gaining momentum
Office workers in Manhattan continue to return to their workplaces in sufficient numbers for many of their employers to maintain or expand their footprint in the city, according to a survey of more than 140 major Manhattan office employers conducted in January by The Partnership for New York City.
Giants 400 | Feb 9, 2023
New Giants 400 download: Get the complete at-a-glance 2022 Giants 400 rankings in Excel
See how your architecture, engineering, or construction firm stacks up against the nation's AEC Giants. For more than 45 years, the editors of Building Design+Construction have surveyed the largest AEC firms in the U.S./Canada to create the annual Giants 400 report. This year, a record 519 firms participated in the Giants 400 report. The final report includes 137 rankings across 25 building sectors and specialty categories.
AEC Tech Innovation | Jan 24, 2023
ConTech investment weathered last year’s shaky economy
Investment in construction technology (ConTech) hit $5.38 billion last year (less than a 1% falloff compared to 2021) from 228 deals, according to CEMEX Ventures’ estimates. The firm announced its top 50 construction technology startups of 2023.
Multifamily Housing | Jan 24, 2023
Top 10 cities for downtown living in 2023
Based on cost of living, apartment options, entertainment, safety, and other desirable urban features, StorageCafe finds the top 10 cities for downtown living in 2023.
Industry Research | Dec 28, 2022
Following a strong year, design and construction firms view 2023 cautiously
The economy and inflation are the biggest concerns for U.S. architecture, construction, and engineering firms in 2023, according to a recent survey of AEC professionals by the editors of Building Design+Construction.
Self-Storage Facilities | Dec 16, 2022
Self-storage development booms in high multifamily construction areas
A 2022 RentCafe analysis finds that self-storage units swelled in conjunction with metros’ growth in apartment complexes.
Industry Research | Dec 15, 2022
4 ways buyer expectations have changed the AEC industry
The Hinge Research Institute has released its 4th edition of Inside the Buyer’s Brain: AEC Industry—detailing the perspectives of almost 300 buyers and more than 1,400 sellers of AEC services.
Multifamily Housing | Dec 13, 2022
Top 106 multifamily housing kitchen and bath amenities – get the full report (FREE!)
Multifamily Design+Construction's inaugural “Kitchen+Bath Survey” of multifamily developers, architects, contractors, and others made it clear that supply chain problems are impacting multifamily housing projects.
Market Data | Dec 13, 2022
Contractors' backlog of work reaches three-year high
U.S. construction firms have, on average, 9.2 months of work in the pipeline, according to ABC's latest Construction Backlog Indicator.
Contractors | Dec 6, 2022
Slow payments cost the construction industry $208 billion in 2022
The cost of floating payments for wages and invoices represents $208 billion in excess cost to the construction industry, a 53% increase from 2021, according to a survey by Rabbet, a provider of construction finance software.