Urban property development trends for 2019 are shifting dramatically. From millennials moving to the suburbs to the renewed focus on sustainability in the building process, investors are seeing changes that will shape the future of property development in urban areas. The following trends are expected to make significant impacts on the construction industry over the next few years:
Millennials Move to the Suburbs
It took some time, but millennials are finally starting to migrate to the suburbs to buy their first single-family homes. Needless to say, it’s one of the biggest, but very smart investments they’ll make in their lifetime. Purchasing a house will actually pay off in the long run, as owners will be able to release home equity and reap financial benefits within a few short years. As a result, housing surrounding large cities is in high demand, and that demand will only increase over the next few years. While downtowns are booming and investors continue to pour money into revitalization, the sudden shift in the younger generation’s mindset regarding housing comes as a surprise.
This new change supports the Census Bureau’s statistics that show evidence of a “second-city suburban shift.” In 2016 and 2017, over 2.6 million people annually moved from cities to the suburbs. Homeowners are also moving from high-cost states like California to less expensive states, which is adding to the shift in the market.
Artificial Intelligence on the Rise
The use of artificial intelligence (AI) in the construction industry is on the rise. This emerging technology is already being used in market analysis and building management, organization and design, and it’s expected to expand into other areas as well. For instance, smart buildings such as “The Edge” in Amsterdam are using AI technology to analyze user behavior in their shared office spaces. It’s suspected that AI will provide similar benefits for the construction industry, including assessing building efficiency, safety, and security.
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Climate Change Reports Bringing Sustainability Back
With climate change in the news again, the U.S. is seeing a renewed focus on sustainability from property investors. The real estate industry has always been proactive in utilizing new sustainability practices as they’ve evolved over the years. Many investors are leaning towards the idea of social responsibility and moving forward to advance sustainability practices, regardless of current political opinion.
With housing affordability on the decline and a crisis looming, investors are cautious. New construction is currently skewed towards the upper end of the market, agitating to the affordability issue. However, if investors can embrace the changes and adjust accordingly, the market might just survive 2019 and beyond.
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