Technology making everything cheaper EXCEPT REAL ESTATE

Today I would like to talk big picture and long term fundamentals. Technology has been disrupting every single industry and it seems that nothing is safe. Technology and globalization have put downward pressure on the prices of almost all goods and services. For example, it is now possible to have website development or more complex coding done for less than $10 dollars per hour by hiring someone online who is working in India. We have already seen the precipitous drop of the cost of data storage and with these new breakthroughs, big data has and will change business forever. Solar will continue to drop in price until we can harness the power of the sun for nearly free. Through synthetic biology and solar, indoor food gardens will be able to produce food for pennies. The cost of energy, food, water, and travel will decrease significantly over the next 10 years. This leaves people more of their income leftover to spend on housing. We have already seen millennials spend a higher proportion of their income on rent than any other generation. With everything else becoming cheaper, I predict the price of housing and rent will go up. The millennial generation (and those coming after it) feels very strongly about living IN cities. Just 15 years ago, the prized assets within the multifamily space were garden, low rise apartments in the suburbs with easy freeway access. Now the most coveted multifamily assets are those with the best walk scores. Tenants want to know how far of a walk it is to Starbucks, their gym, and their work. This trend will continue (read my blog “Why Multifamily?” to learn more) and increase demand for large apartment buildings in cities across the US. The only way to offset this demand would be to create more supply but where do you build additional units in maturely built cities such as New York City, Chicago, and San Francisco? Do you think technological innovation over the next 20 years could bring a disruption to this, resulting in lower demand and prices of real estate? Leave a comment through the Facebook plugin below. The only technological risk I can see coming in the future is autonomous vehicles causing de-urbanization. If self driving cars will be able to take a person to work at speeds over 150 miles per hour while they work on their laptop, I could see certain professionals choosing to live far outside of cities in suburban areas. However, this flies in the face of what millennials and younger generations want, which is to be immersed in a 24-hour city. Walk score, remember?