External Affairs

[Alyssa Bray]

Various demographic issues were frequently cited by our members as an issue for the 2018-19 Top Ten. Here are some of the responses we’ve received so far.

• Real estate is impacted by the once needs and desires of that critical age group (somewhere around 25 to 35). The millennium generation change the net family formation age and consequently the purchasing of homes by 6 to 10 years. I believe that impacts on those of us in all aspects of the real estate world.
• I respectfully submit that generational change in the wants, needs and desires of the generation that are now coming-of-age will certainly impact on apartment demand, lower and single-family residential structures and the entry point (perhaps I mean price point) of these folks as they enter  into the real estate market.  I believe those of us who economically live or die in the real estate market need to consider the changes that are coming towards us in the next 10 to 15 years.  I think the top 10 issues is a tremendous undertaking and certainly has a great deal of value for those of us who practice – especially in less urban areas.
• For developers, agents, investors – better understanding the changes and trends in the psychology and sociology of the real estate market (residential, commercial). For example, changes in attitudes toward home ownership, types of housing)
• Impact of student debt on demand for, and affordability of various types of housing
• Changing workforce– a wave of retirements looming, up to half the energy workforce retiring in 5-10 years, for example).
• Senior living – long-term care development and management
• Collaboration spaces are popping up everywhere.  The leader is WeWork, a global player in the co-working environment catering to the new way of workers who are under 40 years old.  Space is leased by the day all the way up to five years.
• The disappearance of the employee as the contract labor and free lancers are beginning to overtake.  With the off loading of health insurance to the government, the benefit tether is becoming less important-hence more mobility for these new crop.
• One of the top ten issues facing real estate is the depopulation of rural America. When population declines, all areas of real estate are impacted. There is less demand for housing, retail, industrial, offices and other real estate. This affects property values, lease rates, vacancy rates and demand (or lack thereof) for new construction and renovations. Vast swaths of America are impacted by this. Without a turn-around in the demographic trends affecting rural America, solutions to the real estate challenges are very hard to come by.
• The Change in the Birth Rates and the Effects on Real Estate – Toys “R” Us Demise

Have any information to add? Share your comments below, and feel free to share articles and data illustrating this issue.

[Dr. Victor Calanog, Ph.D., CRE]

Demographics and generational change have been part of our Top Ten list for years. Is it something that we will always want to be aware of, anyway, given that real estate is a fundamental human need (shelter/place to do business?) and intimately linked to demographics?  Perhaps it would be useful to zero in on shorter term trends versus “slower moving trends” – what will the oldest of the Millennials do?  Continue to rent or begin to own a home, now that they are in their mid- to late-30s? How should developers best position themselves to take advantage of this?  One among many questions.

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