Emerging Trends in Real Estate 2020: What Does it Mean for Investors?
PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI) recently published the 2020 edition of their highly anticipated Emerging Trends in Real Estate® (ETRE) report. ETRE is a highly regarded annual report that, now in its 41st year, presents trends and analysis covering real estate investment and development, finance, metropolitan areas, and property sectors in the United States and Canada.
This year, the research team surveyed more than 1,500 industry experts and then further interviewed more than 750 of those individuals in greater depth. These are the people who are most in the know about real estate. Therefore, the report can be a great resource for multifamily real estate investors looking for insights to help fuel their strategy during the coming year. Whether you are deeply experienced or just starting out, there is valuable information for everyone.
However, we know that you’re busy and may not get to reading the report right away. So, we’ve summarized some of the more salient points relevant to the US market and multifamily real estate, in particular. Read on to see the highlights.
Prognosis for the economy and real estate in general
Experts predict a relatively stable outlook for real estate in 2020
Survey respondents and focus groups participants indicated not seeing much change since last year. There was a general sense that things have been “static” or at least “on track” in terms of property development and investment.
The survey of expected Firm Profitability Prospects for 2020 also shows very little change from last year. Participants were asked about their firm’s profitability expectations for 2020 giving them the three options of: 1) Abysmal–poor, 2) Fair, or 3) Good–excellent. Since 2016 the percentage of those responding with Abysmal has remained close to zero. Those in the Good camp decreased by about 10% (from 85% to 75%) between 2016 and 2019. Lastly, those in the Fair camp increased by 10% (from 15% to 25%) between 2016 and 2019. So, there was a very slight trend towards a more pessimistic view, but the overall sense is still quite positive!
Another survey, Emerging Trends Barometer 2020, asked participants whether 2020 would be a good time to Sell, Hold, or Buy. Again, we see very little change since 2016 with a slight uptick in Buy and slight downtick in Sell and Hold.
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