DALLAS, TX – Niche neighborhoods and economic diversity are driving forces behind the strong showing of this year’s top ten U.S. cities, according to Emerging Trends in Real Estate 2017, released by PwC US and the Urban Land Institute (ULI). Austin, Texas, wins “Top City,” thanks to its authentic, niche neighborhoods and depth of economic diversity, from manufacturing to education, health care and technology. Construction labor shortages and the rapid spread of digitization throughout the industry are also playing key roles in fueling 2017 real estate trends, along with “Optionality,” the multi-purposing of in-demand spaces.

Now in its 38th year, Emerging Trends in Real Estate is one of the most highly regarded annual industry outlooks for the real estate and land use industry. It includes interviews and survey responses from more than 1,800 leading real estate experts, including investors, fund managers, developers, property companies, lenders, brokers, advisers and consultants.

“Viewed as a fluke when it hit the study’s top ten list 5 years ago, Austin’s rise to the top of the list signals the durability of the city’s long-term appeal to investors,” says Mitch Roschelle, PwC Partner and Real Estate Research Leader.  “Austin, along with many of this year’s top 10 cities, boasts attractive, niche neighborhoods and a vibrant, diverse economy.”

“This year’s report shows that there are opportunities stemming from a shift in how, where, and when people work,” says ULI Global Chief Executive Officer Patrick L. Phillips. “One of the trends leading to new opportunities is multi-purposing of commercial space. We’re seeing different types of tenants using the same space for different uses at different times of the day, particularly in tight markets. Buildings with open, flexible space have a competitive advantage.”  

Top Trends:

Niche Neighborhoods & Economic Diversity: Market characteristics such as authentic, niche neighborhoods with strong economic diversity are driving growth outside of gateway markets. The attractiveness to both workers and employers alike is supporting real estate growth.

Labor Shortages: Construction labor shortages are driving up construction costs and stretching out project timelines, directly impacting availability of affordable real estate across all residential sectors.

“Optionality” – A new driving force landlords can use to protect revenue potential by allowing multiple uses of the same space at different times, and permitting tenants to use only the space they need when they need it.  For example, an office by day and a party/event venue by night.

Digitization & Transparency: The digitization of real estate is revolutionizing the industry by improving accuracy, transaction speed and transparency, which in turn is fueling an “auto-correcting” real estate cycle.  Rising property prices slowing transaction volumes while new supply remains under control is holding off the traditional “boom/bust” of previous cycles.

Top 10 Cities in Emerging Trends in Real Estate 2017:

Austin, TX

Dallas/Fort Worth, TX

Portland, OR

Seattle, WA

Los Angeles, CA

Nashville, TN

Raleigh/Durham, NC

Orange County, CA

Charlotte, NC

San Francisco, CA

Dropping out of the top 10 market ranking this year are Atlanta, GA and Denver, CO due to concerns that new supply may be getting ahead of demand.  Despite the drop, both markets remain in the top 20.  

Top 5 Markets to Watch and Why:

Columbus – A major university town, Columbus is seeing a surge in entrepreneurial activity.  

Richmond – The “hip factor” of downtown Richmond is on the rise.  

Pittsburgh – Emerging tech and other startups are flocking to Pittsburgh because of the access to talent from nearby universities and a 4% lower-than-the-national-average cost of doing business. 

Charleston – The Charleston economy is hitting on all cylinders with strong demographic growth and expanding technology, manufacturing and transportation industries.  

Salt Lake City – Salt Lake City is benefitting from a unique synergy between financial services and technology firms. 

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FALL RIVER, MA – The NHP Foundation, a national not-for-profit, announced its sponsorship of a 12-month renovation of the Ships’ Cove Apartments in Fall River, MA. Originally part of NHPF’s property portfolio, Ships’ Cove is now under the auspices of NHPF and the property’s new owner, Ships’ Cove Preservation Partners Limited.

NHPF will lead the revitalization effort and act as the developer of an $8 million renovation to the property. Additional financing partners for the rehabilitation include the U.S. Department of Housing and Urban Development, Massachusetts Development Finance Agency, Massachusetts Department of Housing and Community Development, RBC Tax Credit Equity LLC, Wells Fargo Bank, National Association, and Citizens Bank, NA.

Located at 130 Canal Street in Fall River, MA, Ships’ Cove is a high-rise building located centrally to public transportation as well as many other public and commercial amenities and features 201 one- and two-bedroom apartments with incredible views of historic Battleship Cove. The renovation process, which is set to start in November and be completed by the end of 2017, will include improvements to units, common areas, building systems and the building exterior, as well as accessibility improvements and installation of utility conserving fixtures, to improve the quality of life for current and future residents of Ships’ Cove as an vital affordable housing resource in Fall River.

“Ships’ Cove is a significant part of the affordable housing landscape in the city of Fall River,” said Richard Burns. “To be part of a partnership that is focused on preserving the availability of quality affordable housing for families in a location with access to public transportation, schools, medical facilities and job opportunities, is not only incredibly exciting, but is exactly what affordable housing preservation should be focused on every day.”

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NEW YORK, NY – S&P Dow Jones Indices released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data for August 2016 shows that home prices continued their rise across the country over the last 12 months.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.3% annual gain in August, up from 5.0% last month. The 10-City Composite posted a 4.3% annual increase, up from 4.1% the previous month. The 20-City Composite reported a year-over-year gain of 5.1%, up from 5.0% in July.

Portland, Seattle, and Denver reported the highest year-over-year gains among the 20 cities over each of the last seven months. In August, Portland led the way with an 11.7% year-over-year price increase, followed by Seattle at 11.4%, and Denver with an 8.8% increase. Ten cities reported greater price increases in the year ending August 2016 versus the year ending July 2016.

Before seasonal adjustment, the National Index posted a month-over-month gain of 0.5% in August. Both the 10-City Composite and the 20-City Composite posted a 0.4% increase in August. After seasonal adjustment, the National Index recorded a 0.6% month-over-month increase, and both the 10-City Composite and the 20-City Composite reported 0.2% month-over-month increases. After seasonal adjustment, 14 cities saw prices rise, two cities were unchanged, and four cities experienced negative monthly prices changes.

“Supported by continued moderate economic growth, home prices extended recent gains,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “All 20 cities saw prices higher than a year earlier with 10 enjoying larger annual gains than last month. The seasonally adjusted month-over-month data showed that home prices in 14 cities were higher in August than in July. Other housing data including sales of existing single family homes, measures of housing affordability, and permits for new construction also point to a reasonably healthy housing market.

“With the national home price index nearly surpassing the peak set 10 years ago, one question is how the housing recovery compares with the stock market recovery. Since the last recession finished in June 2009, the stock market as measured by the S&P 500 rose 136% to the end of August while home prices are up 23%. But, home prices did not reach bottom until February 2012, nearly three years later. Using the 2012 date as the starting point, home prices are up 38% compared to 59% for stocks. While the stock market recovery has been greater than the rebound in home prices, the value of Americans’ homes at about $22.3 trillion is slightly larger than the value of stocks and mutual funds at $21.2 trillion.”

More than 27 years of history for these data series is available, and can be accessed in full by going to www.homeprice.spdji.com. Additional content on the housing market can also be found on S&P Dow Jones Indices’ housing blog: www.housingviews.com.

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