Forecast 10 Year Horizon

[Pete Schwan]

Recently attended a great seminar hosted by the #1 commercial real estate platform in the country. The focus was on Multi-Fam Outlook Nationally and in the Boston Market. Because I know the Boston Market, I was able to cross reference the data they presented with what I'm seeing in real life. They seemed to be spot on with what happened from 2009-2016 and with predicting the construction trends. 

My question to the BP Forum is whether or not the national trends are consistent with what folks are seeing in their respective markets. To summarize the presenter's main points:

• Since 2009 rental housing demand was outpacing supply until mid 2016, when supply finally caught up with demand
• Nationally, homeownership is low which has kept rental housing demand up
• As a nation, we are significantly under-housed
• As the Millenials begin to get married and start families there will be a significant increase in demand for "work-force housing" or "starter homes." The majority of the inventory is studios and 1-Bedrooms (in the cities).

Conclusion was essentially that Baby Boomers are down sizing and Millenials are going to need small Single Fams and this is going to create a huge demand for "Work Force Housing" for the next 10 years-ish timeline. This is in Small to Mid-sized markets, not the biggest cities in the nation. Anyone agree/disagree with this forecast? Thanks! ~Pete

[Rich Thomas]

Hey Pete Schwan , I followed this post because I think its pretty relevant to me and my area...or atleast I hope. Im on the northshore in salem..we have a commuter rail that goes through the city directly into boston. (About 35 min into north station)
Your section about millenials needing housing over the next 10+ year has been on my mind alot.
I currently own a couple of multi families as well as a single family (3bed/2 bath), which I currently live in with my wife.
Do you think the housing need for millenials will reach out from the city to some of the smaller towns ( ie salem) ? I hope that is the case as my wife and I do not want to stay in salem for much more than 4-5...my only worry is that we will be in a real estate downturn at that time...hopefully the young millenials will keep the housing market growing. The boston area seems super saturated with condos going for crazy prices again...I have alot of friends that are the young business type 8-10 years out of college paying the rediculous rents to live in the city...Im hoping once those types start to settle down and have families they will move to the outter parts of boston and create a strong single family housing market...let me know your thoughts...

Anyways, thanks for the informative post!

Rich