PwC recently published a report that looks at emerging trends in real estate in the U.S. and Canada. Included in that report is a list of the top five markets to watch in 2020. Here they are in a nutshell:
- Austin, Texas
- Raleigh-Durham, North Carolina
- Nashville, Tennessee
- Charlotte, North Carolina
- Boston, Massachusetts
Nevermind that four of these five are in the south, and two of them are in North Carolina. What do these five markets reveal about real estate development going into 2020?
What to Real Estate Developers Should Know For Next Year
From Austin to Boston, real estate developers have a wide diversity of opportunities going into 2020.
High Investor Demand
Austin rose from sixth place in 2019 to first place for 2020. What’s so special about this Texas capital? Better yet, what can real estate developers learn about this potential hot market?
There is a lot of investor demand in Austin. What that means is, there is plenty of potential for development. But people in Austin are different than other places (what would you expect from the slogan “Keep Austin Weird”). There is a lot of expansion taking place in Austin and real estate developers should see it as a market rife with opportunity.
Suburban Office, Multifamily, and Technology
Raleigh-Durham is not what you think about when you think about the technology sector. However, there are now more than 89,000 tech jobs in this metro area. For that reason, developers should see it as the Eastern seaboard’s Silicon Valley. That spells opportunity.
The homebuilding trend seems to be multifamily. That could be because of the local colleges. It is home to Duke University, the University of North Carolina, and North Carolina State University. There is also a lot of suburban office opportunities as the business sector continues to grow.
The Slowing Pace of Homebuilding
While Nashville moved from first to fourth place in homebuilding outlook, it isn’t all bleak for this 18-hour city. The homebuilding market may be cooling, but it’s not dead. And, because the city moved up to third from fifth in overall real estate, there is still plenty of development taking place in other sectors. While home sales are slowing, real estate values are increasing. That’s an environment that offers a different kind of opportunity for investors as high-end homes could be the target.
Manufacturing, Technology, and Homebuilding
Charlotte is another city that has moved up in rankings. Up from ninth, the city is now fourth in overall real estate opportunities, and second in terms of homebuilding. But there are commercial opportunities, as well. The city is growing in terms of attracting technology and manufacturing companies. Real estate developers that specialize in those real estate sectors should have plenty of opportunities.
Unique Development Opportunities in Boston
Boston is a rich city with a lot of diversity. Real estate prices have increased in the past few years, as have median home sales. It’s a smaller market, but there are still a lot of development opportunities, and a lot of it is high-end development. That could be because the price of real estate in Boston is not cheap.
Another reality that drives this market is scarcity. There just isn’t a lot of inventory, and the raw land left for new development is scarce. What that means is a guarantee on appreciation, which spells a hot market for buy-and-hold investors.
There is also an interest in downtown Boston condos, apartments, and single-family homes. Real estate is more expensive in downtown, but it’s a lifestyle choice for many millennials and seniors who want to live closer to the amenities they enjoy. Each of these markets spells a ripe opportunity for real estate developers.
Real Estate Markets Conclusion
Each of the top 5 markets for 2020 offers different types of development opportunities for real estate developers. Those opportunities are tied to investor desires as well as homeowner interests. Developers looking for lucrative markets, whether in pure return on investment opportunities or in volume opportunities, should consider these markets.