Real Estate Trends

What to Expect for "2018"

The housing picture is likely to improve in 2018. Why? Home prices are expected to climb, but not as fast.

Plus, more houses could be for sale toward the end of the year, giving homebuyers a greater selection to choose from, while homeowners will have more equity to borrow from.

Yet in other ways, 2018 might continue to be challenging, especially for homebuyers. Mortgage rates are likely to rise, reducing affordability.

Here are 10 housing and mortgage trends to expect in 2018.

1. Home prices decelerate

Good news for first-time homebuyers: Home-price appreciation is expected to cool down in 2018 after a torrid couple of years.

Home prices rose 6.3% in 2016, according to the Federal Housing Finance Agency. They're on track to exceed 6% in 2017, too. But for next year, the median forecast among six industry and lender groups is for a 4.1% increase in existing home prices nationwide.

Why the slowdown? One factor is home construction. Economists expect the construction of single-family houses to rise sharply in 2018, based on building permit applications. The median estimate has single-family housing starts rising about 8% in 2018, to roughly 912,500 new houses.

2. More homes for sale

Homebuyers are struggling to find houses for sale. The shortages are especially acute for the kinds of homes that first-time buyers tend to get. Among the reasons for the tight supply:

·Many baby boomers are content to age in their homes instead of downsizing

·Investors bought millions of homes after the housing bubble burst, and they're making too much money as landlords to sell

·Home builders make more profit from expensive houses than entry-level houses, so that's what they're constructing

But there's some hope for 2018: Realtor.com predicts that the housing supply pinch will begin to ease late in the year.

"It looks like we could get to a point where we're seeing growth in inventory sometime in the fall of 2018," says Danielle Hale, chief economist for Realtor.com.

3. Home sales could rise

Resales of existing homes are expected to rise modestly in 2018. The median estimate is that existing home sales will rise 2.5%, to 5.6 million units.

Meanwhile, sales of new homes are expected to rise a median of 7%, to 653,500 newly built single-family houses.

According to Realtor.com, cities in the South will show the most sales growth in 2018. Hale says she expects 6% existing home sales growth, particularly in markets such as Dallas; Tulsa, Oklahoma; Little Rock, Arkansas; and Charlotte, North Carolina. Hale says those places are not as "regulation constrained," they have strong regional economies and developers have plenty of vacant land to build on.

4. Mortgage rates head up

Mortgage rates are expected to rise in 2018. CoreLogic, a data provider for the real estate industry, averaged six forecasts of mortgage rates, arriving at a consensus view that the 30-year fixed will average 4.7% in December 2018. In November 2017, the 30-year, fixed-rate mortgage averaged 4.07%.

"Not only are mortgage rates higher, but mortgage rates will be at the highest level since 2011," Nothaft said at the Urban Institute symposium. "So we're looking at an environment, going forward, where this era of cheap mortgage rates will largely be behind us."

Interest rates are notoriously resistant to prediction, though. At the beginning of 2017, most people expected mortgage rates to rise steadily throughout the year. And they did rise - for a few weeks. The average 30-year fixed peaked in mid-March 2017 at 4.58%, according to NerdWallet's daily survey. Then it declined, dipping slightly below 4% a few times in the summer, before moving upward slightly in the fall.

5. Affordability declines

If, as expected, home prices and mortgage rates go up in 2018, homes will be less affordable.

For example, if mortgage rates rise to 4.7% toward the end of 2018, and the median price of existing homes rises by 4.1%, then monthly mortgage payments for a typical house would rise substantially.

But according to an Urban Institute analysis, middle-class families in much of the country still have some financial wiggle room if rates and prices rise in 2018. Most home buyers don't appear to stretch to the limits of affordability, the Urban Institute wrote.

6. More equity, more HELOCs

As home values rise, homeowners gain equity. And banks expect millions of homeowners to borrow against that equity.

About 1.6 million homeowners are predicted to get new home equity lines of credit in 2018, a 16% increase over 2017, according to a recent TransUnion study. The credit bureau says 67% of homeowners have enough equity to get HELOCs, and 80% of those borrowers have high credit scores.

TransUnion forecasts that 10 million homeowners will get HELOCs from 2018 through 2022, double the number of new lines of credit in the five years before that.

7. Security headaches continue

Thieves are stealing down payments from homebuyers by combining email hacking with wire fraud. And there's no sign of it slowing.

Complaints of this type of wire fraud skyrocketed by 480% in 2016, according to the 2016 annual report (the latest available) from the FBI's Internet Crime Complaint Center. Lenders and title companies say the problem worsened in 2017, and that they fend off this form of fraud constantly.

The best way to avoid becoming a victim: When you receive emailed instructions for wiring money, call your agent to verify. The email may be a fake, designed to trick you into wiring money into a thief's account.

8. More options for people with credit issues

A few specialty lenders are focusing on nontraditional mortgages. For example, Angel Oak Mortgage Solutions in Atlanta targets the borrower 'who has had a life event, so they lost their house or had to file bankruptcy or things got really bad, but they've now got their feet back on the ground and they're ready to buy their next house,' says Tom Hutchens, the lender's senior vice president of sales and marketing.

Several lenders offer interest-only mortgages, and even loans with limited income documentation. These mortgages are dubbed 'non-QM' because they don't meet Fannie Mae's and Freddie Mac's plain-vanilla 'qualified mortgage' rules. One prominent non-QM lender, Impac Mortgage Holdings, plans to begin securitizing these loans early in 2018.

9. Lenders embracing automation

Mortgage lenders continue to pour money into automating the loan-application process. The best-known example is Rocket Mortgage by Quicken Loans. But Quicken isn't the only lender that embraces automation. Some lenders, such as loanDepot, cook up their own automation in-house, while software providers such as Blend and Roostify help large and small banks to automate applications. Now a few lenders want to use automation to guide borrowers to loan products that best suit them.

10. Tax reform could affect buyers and owners

Lawmakers were still working on tax reform as this article was being written. Preliminary House and Senate versions limited the number of home sellers who would benefit from the home capital gains exclusion, and they treated the mortgage interest tax deduction differently. It's too early to know how a final tax reform bill would affect home buyers and homeowners, but we will keep you posted.

Will Florida Real Estate Prices Fall? No Chance!

 Orlando and Tampa are among the large U.S. markets least likely to see home prices fall in the next two years, according to a report from Arch Mortgage Insurance.

The report finds that home prices have only a 2 percent chance of falling in Orlando and Tampa over the next two years, a low-risk level that tied 36 other U.S. markets.

At the other end of the spectrum, Fort Lauderdale and Nashville probably won't see prices rise over the next two years either, but they still have a noticeably higher risk with a 35 percent chance of that happening. Austin, Texas, has the third-highest probability, at 25 percent, followed by Miami's 17 percent and West Palm Beach's11 percent, according to Arch MI.

In explaining Fort Lauderdale's and Nashville's rates, Arch MI cites "home prices growing faster than incomes, which is hurting affordability."

Arch MI estimates that the average probability of home-price declines for America's 401 largest cities is 4 percent, which it calls "an unusually low number."

The report suggests that Florida will remain the best economic performer in the South for at least another year, led by tourism, residential and public construction.

The report also found that Orlando is one of America's 10 hottest housing markets, when looking at the country's 100 biggest metros. Orlando's home price index grew 12.5 percent in the past year.

Root Causes for U.S.'s Depressed Homeownership Rate

Despite steadily improving local job markets and historically low mortgage rates, the U.S. homeownership rate is stuck near a 50-year low because of a perverse mix of affordability challenges, student loan debt, tight credit conditions and housing supply shortages.

That's according to findings of a new white paper titled, "Hurdles to Homeownership: Understanding the Barriers," released in recognition of National Homeownership Month at the recent National Association of Realtors® (NAR) Sustainable Homeownership Conference at University of California, Berkeley.

Led by a group of prominent experts, including NAR 2017 President William E. Brown, NAR Chief Economist Lawrence Yun and Berkeley Hass Real Estate Group Chair Ken Rosen, the conference addressed the dip and idleness in the homeownership rate, its drag on the economy and what can be done to ensure more creditworthy households have the opportunity to buy a home.

"The decline and stagnation in the homeownership rate is a trend that's pointing in the wrong direction, and must be reversed given the many benefits of homeownership to individuals, communities and the nation's economy," Brown said. "Those who are financially capable and willing to assume the responsibilities of owning a home should have the opportunity to pursue that dream." One of Brown's main objectives as president of NAR is identifying ways to boost the homeownership rate in a safe and responsible way.

The research was commissioned by NAR, prepared by Rosen Consulting Group (RCG). and jointly released by the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley Haas School of Business. It identifies five main barriers that have prevented a significant number of households from purchasing a home. They are:

Post-foreclosure stress disorder: There are long-lasting psychological changes in financial decision-making, including housing tenure choice, for the 9 million homeowners who experienced foreclosure, the 8.7 million people who lost their jobs, and some young adults who witnessed the hardships of their family and friends. While most Americans still have positive feelings about homeownership, targeted programs and workshops about financial literacy and mortgage debt could help return-buyers and those who may have negative biases about owning.

Mortgage availability: Credit standards have not normalized following the Great Recession. Borrowers with good-to-excellent credit scores are not getting approved at the rate they were in 2003, prior to the period of excessively lax lending standards. Safely restoring lending requirements to accessible standards is key to helping creditworthy households purchase homes.

The growing burden of student loan debt: Young households are repaying an increasing level of student loan debt that makes it extremely difficult to save for a downpayment, qualify for a mortgage and afford a mortgage payment, especially in areas with high rents and home prices. As NAR found in a survey released last year, student loan debt is delaying purchases from millennials and over half expect to be delayed by at least five years. Policy changes need to be enacted that address soaring tuition costs and make repayment less burdensome.

Single-family housing affordability: Lack of inventory, higher rents and home prices, difficulty saving for a downpayment and investors weighing on supply levels by scooping up single-family homes have all led to many markets experiencing decaying affordability conditions. Unless these challenges subside, RCG forecasts that affordability will fall by an average of nearly 9 percentage points across all 75 major markets between 2016 and 2019, with approximately 5 million fewer households able to afford the local median-priced home by 2019. Declining affordability needs to be addressed with policies enacted that ensure creditworthy young households and minority groups have the opportunity to own a home.

Single-family housing supply shortages: "Single-family home construction plummeted after the recession and is still failing to keep up with demand as cities see increased migration and population as the result of faster job growth," said Rosen. "The insufficient level of homebuilding has created a cumulative deficit of nearly 3.7 million new homes over the last eight years."

Fewer property lots at higher prices, difficulty finding skilled labor and higher construction costs are among the reasons cited by RCG for why housing starts are not ramping up to meet the growing demand for new supply. A concentrated effort to combat these obstacles is needed to increase building, alleviate supply shortages and preserve affordability for prospective buyers.

"Low mortgage rates and a healthy job market for college-educated adults should have translated to more home sales and upward movement in the homeownership rate in recent years," said Yun. "Sadly, this has not been the case. Obtaining a mortgage has been tough for those with good credit, savings for a downpayment are instead going towards steeper rents and student loans, and first-time buyers are finding that listings in their price range are severely inadequate."

Added Rosen, "A healthy housing market is critical to the overall success of the U.S. economy. Too many would-be buyers have been locked out of the market by the factors found in this study, and it's also one of the biggest reasons why economic growth has been subpar in the current recovery."

South Florida has an Affordable Housing Crisis!!

Rising property values are pricing many new workers out of South Florida and creating an affordable housing crisis, Palm Beach County officials and real estate experts said during a summit convened Wednesday to address the issue.

“This is the most serious public policy issue we are dealing with here in South Florida along with rising sea levels,” said Edward “Ned” Murray, associate director of the Metropolitan Center at Florida International University.

The statistics show the extent of the problem, he said. While housing prices continue to climb, incomes have not kept up.

Palm Beach County’s median home price of $327,000 is unaffordable to 75 percent of households. The median home price is $330,000 in Broward County, while the median price in Miami-Dade County $320,000.

Palm Beach County’s median gross rent of $1,900 is out of the reach of 80 percent of renters, according to Murray’s research. Average rent in Broward County is $1,800, which is unaffordable for 78 percent of renters. The situation is worse in Miami-Dade County, where an average rent of $2,175 is unaffordable for 89 percent of renters.

About 56 percent of Palm Beach County renters are considered to be burdened, meaning they spend more than 30 percent of their income on housing. Almost a third are severely cost burdened, meaning they spend more than half their income.

In Broward County, 59 percent of renters are considered to be cost burdened and almost a third severely cost burdened. Almost 62 percent of Miami-Dade renters are cost burdened and 35 percent are severely cost burdened.

College graduates and entry-level hires willing to relocate turn down job offers when they find out the cost of housing, Palm Beach County officials and business leaders said.

The school system is facing a shortage of teachers because they can’t make it on an educator’s salary, and some families are even left homeless, forced to sleep in cars or the woods, Palm Beach County Mayor Paulette Burdick said.

A combination of high housing costs and relatively low incomes made South Florida home to the highest percentage of cost-burdened renters in the country, according to a recent report by the Joint Center for Housing Studies of Harvard University.

South Florida is losing out to other metropolitan areas because of the high cost of housing, Palm Beach County Administrator Verdenia Baker said.

The county invests in education, but graduates are moving to cities where housing is more affordable, she said.

“They are moving to Houston, Texas,” Baker said. “They are moving to Tampa, Florida. That is the investment in Palm Beach County that does not yield a return.”

More than 500 elected officials, business leaders and housing experts convened at Palm Beach County Convention Center on Wednesday to consider solutions.

Proposals included building transit-orientated developments that would allow workers to lower their costs by tapping into mass transit, waiving building fees and granting tax incentives for workforce housing projects and allowing increased density for new developments with price-capped units.

One speaker said turning shipping containers into homes could be an innovative way to lower the cost of housing.

“Look at them like Lego blocks,” said Craig Vanderlaan, executive director of Crisis Housing Solutions. “You can have fun with them. … Millennials absolutely love this stuff."

Container homes have already started popping up in South Florida, and some are posted for rent on the home-sharing website Airbnb.

County officials will gather the recommendations made at the summit and present proposals for county commissioners to consider.

What Traits Maximize Home Value Increases?

A home's value generally appreciates 3 percent to 4 percent every year, which is attributed mostly to population growth and inflation. In 2016, however, homeowners saw appreciation jump to an average of 6.3 percent.

What traits lead some homes to appreciate more than others?

Realtor.com's research team studied appreciation to find out what traits boost a home's value even more – and what features buyers may be willing to pay more to have. They analyzed data from millions of listings on realtor.com from 2011 to 2016 to calculate the annual price growth rate of homes by features.

Winners in housing appreciation

Small homes: Homes smaller than 1,200 square feet appreciated by an average rate 7.5 percent a year for the past five years. On the other hand, larger homes of 2,400 square feet or more rose by 3.8 percent a year. The smaller-home demand is being driven by millennials wanting to enter the market with a more affordable starter home and baby boomers looking to downsize. In addition, smaller homes are in shorter supply, which is prompting prices to increase more due to the high demand, says Jonathan Miller, president of Miller Samuel, a real estate appraisal firm.

Two-bedroom homes: Homes with two bedrooms appreciate at a rate of 6.6 percent a year, compared to homes with five bedrooms that appreciate at 4.3 percent a year.

Open floor plans: Homes with open floor plans appreciate 7.4 percent a year. It's the hottest appreciating home feature that realtor.com studied. As for features like stainless steel and granite, Miller says those amenities don't really add any value to a home. "Those are what I call 'have-to-have' features," Miller says. "A home needs to have them in a competitive market. But they don't add long-term value. … Ten years from now, when you update your kitchen, they'll be replaced."

Modern and contemporary homes: Modern and contemporary architectural styles have the highest potential for appreciation, increasing at about 7.7 percent annually. This style of home is known for simple, geometric shapes and large windows. Newly constructed modern homes also tend to be energy efficient.

Bungalows and traditional are the next highest appreciating styles at 6.5 percent and 5.6 percent, respectively. Meanwhile, niche styles like Craftsman bungalows and Victorians are among the lowest appreciating architectural styles, at 3.7 percent and 2.2 percent, respectively.

Researchers speculate that may be due to some of the maintenance responsibilities in staying true to the home's historical architecture that is often connected to these styles of homes.

Green space views: Homes with a park view appreciate at 7.9 percent a year. "[They] hold value over a longer period of time, and they recover quickly from a downturn," says Michael Minson, a real estate pro in San Francisco at Keller Williams. "Buyers appreciate the tranquility and outdoor activities. They like being close to nature."

Homes with mountain views appreciated on average by 5.1 percent, and homes with a lake view at 4.9 percent. Ocean views appreciated the least of the "home views" studied, at just 3.6 percent a year. Recent storms may have spooked buyers from oceanfront properties as well as the fact that the highest-cost homes tend to be along the ocean, realtor.com's research team notes.

Miami Housing Market Continues on the Rise "↑"

Florida's housing market continued to report a tight supply of homes for sale and rising median prices in February, according to the latest housing data released by Florida Realtors®. Sales of single-family homes statewide remained relatively flat last month, totaling 18,033, down only 0.5 percent compared to February 2016.

"Florida's economy is growing, with more jobs being created," said 2017 Florida Realtors President Maria Wells, broker-owner with Lifestyle Realty Group in Stuart. "And a growing economy boosts the state's housing sector as well. However, many local markets are reporting a low inventory of for-sale homes at a time of increasing buyer demand. For sellers, it's a good time to list their homes, as they continue to get more of their original asking price at the closing table. In February, sellers of existing single-family homes received 95.8 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.7 percent.

"In these kinds of market conditions, serious home buyers must be prepared to act fast, and work closely with a local Realtor to find the right home for their needs and their budget."

The statewide median sales price for single-family existing homes last month was $225,000, up 12.5 percent from the previous year, according to data from Florida Realtors research department in partnership with local Realtor boards/associations. Thestatewide median price for townhouse-condo properties in February was $167,500, up 11.7 percent over the year-ago figure. February marked the 63rd month in a row that statewide median prices for both sectors rose year-over-year. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors (NAR), thenational median sales price for existing single-family homes in January 2016 was $230,400, up 7.3 percent from the previous yearthenational median existing condo price was $217,400.In California, the statewide median sales price for single-family existing homes in January was $489,580; in Massachusetts, it was $330,000; in Maryland, it was $261,868; and in New York, it was $250,000.

Looking at Florida's townhouse-condo market, statewide closed sales totaled 7,949 last month, up 4.1 percent compared to February 2016. Closed sales data reflected fewer short sales and cash-only sales last month: Short sales for townhouse-condo properties declined 39.6 percent while short sales for single-family homes also dropped 39.6 percent. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

"Florida's market for existing single-family homes in February continued to perform in line with what we've seen over the past year and a half," said Florida Realtors®Chief Economist Dr. Brad O'Connor. "Due primarily to fewer distressed properties on the market, sales of single-family homes edged down. However, non-distressed sales of single-family homes were up almost 10 percent year-over-year, showing that the traditional market – as opposed to the niche distressed market – is healthy and continues to grow.

"Meanwhile, Florida's condo and townhouse sales are off to very good start in 2017. Coming off a 6.2 percent year-over-year increase in January, condo and townhouse sales rose 4.1 percent year-over-year in February. For perspective, the last time statewide condo and townhouse sales rose on a year-over-year basis for two consecutive months was in August and September of 2015."

For the second consecutive month, inventory remained at a tight 4.2-months' supply in February for single-family homes, and was at a 6.4-months' supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.17 percent in February 2016, up significantly from the 3.66 percent average recorded during the same month a year earlier.

New Home Buyers: Act now before Cost of Construction Goes Up

The cost of building materials jumped 25 percent year-to-year, according to the National Association of Home Builders' NAHB/Wells Fargo Housing Market Index, and builders are increasingly concerned about how this will affect homebuyers in the new-construction market.

In 2016, builders ranked building material costs low on their list of concerns – but now it's one of their top five issues.

The increased cost of lumber is a chief catalyst.

"Negotiations on a new softwood lumber agreement between the United States and Canada ground to a halt at the end of 2016 and likely are stalled pending the results of an investigation into unfair import practices requested by the U.S. Lumber Coalition," NAHB reports.

Because of the lumber problem, homebuyers will likely face price hikes.

According to the NAHB/Wells Fargo Housing Market Index, builders cited the following as the 10 most significant problems they expect to face in 2017:

  1. Cost/availability of labor: 82%
  2. Cost/availability of developed lots: 67%
  3. Impact/hook-up/inspection or other fees: 61%
  4. Building material prices: 60%
  5. Federal environmental regulations and policies: 52%
  6. Local/state environmental regulations and policies: 52%
  7. Regulation of banking/financial institutions: 48%
  8. Development standards (parking, setbacks, etc.): 47%
  9. Inaccurate appraisals: 46%
  10. Health insurance: 40%

Fed Looks to Hike Up Interests Again in March

Many Federal Reserve officials said the central bank may raise interest rates "fairly soon" and "potentially at an upcoming meeting" to head off a pickup in inflation, leaving the door firmly open to a March rate hike, according to minutes of the Fed's Jan. 31-Feb. 1 meeting.

Fed policymakers said such a step could be necessary if the advances of the labor market and inflation were "in line with or stronger than their current expectations."

The Fed also has started to discuss shrinking its $4.5 trillion balance sheet, a move that would mark a milestone in the 71/2-year-old economic recovery and could push up long-term interest rates.

Fed officials seem to be increasingly concerned they may need to get ahead of accelerating inflation by nudging short-term rates higher sooner rather than later.

"A few participants noted that continuing to remove policy accommodation in a timely manner, potentially at an upcoming meeting, would allow the committee greater flexibility in responding to subsequent changes in economic conditions," the minutes said.

Among the chief reasons Fed officials foresee the possibility of faster growth and inflation is President Trump's proposed infrastructure spending and tax cuts. Policymakers "continued to view the possibility of more expansionary fiscal policy as having increased the upside risks to their forecasts," the minutes said. But some officials also perceived risks of slower growth from some of Trump's proposals, presumably restrictions on trade.

Several policymakers also said the risk of "undershooting" the Fed's long-run unemployment target was "high, particularly if economic growth was faster than currently expected."

In that case, the Fed might have to raise rates more rapidly than anticipated to curtail inflation, bolstering the argument for lifting rates next month.

February is the Best for Housing Bargins

Frigid temperatures and treacherous winter weather are here to stay a little while longer, since the groundhog Punxsutawney Phil saw his shadow this morning, signaling six more weeks of winter.

This weather prediction may even bring more deals for buyers wanting to kickstart their home search. Typically winter months have a higher number of housing bargains due to stressful weather conditions and lack of competition, with February coming out on top as the month with the most housing deals.

In fact, a recent study by Attom Data Solutions looked at the sales of 50 million homes from 2000 through 2016 and found that the median selling price during February was around $104 per square foot, a 6 percent discount over the rest of the months of the year.

With these housing bargains, why aren't more people buying this time of year? According to Daren Blomquist, senior vice president at Attom Data Solutions, besides the difficult winter weather, many potential buyers are cash-strapped after the holidays and don't want move during the middle of the school year.

Sellers in the winter months are also willing to make a deal. “It’s a buyer’s market during the colder winter months,” says NAR President William E. Brown. “When sellers list in the winter, they know it’s slower, so they’re more motivated and more willing to negotiate.”

If your buyers aren't quite ready, let them know that March and April are also good months for bargains, boasting discounts of 4 percent and 2 percent over the annualized median price of $110 per square foot.

3 Commercial Real Estate Trends to Watch For

The digital era continues to affect businesses’ needs with physical space in commercial properties. Commercial firm broker-owners are keeping their eye on three trends Transwestern recently highlighted in its first quarter Insights report:

1.     Retail: Rise of Mobile Data
Retailers are getting more sophisticated in collecting mobile data about their customers. Many businesses use mobile apps coupled with monitoring devices in their stores to track and interact with customers. If a consumer has that business’s app on their phone, it allows the retailers to engage with them by offering coupons or product suggestions. This personalized shopping experience provides specialized data on consumer activity and interactions with the physical store location, according to Transwestern, and it’s influencing business owners’ location decisions and physical configuration needs at the storefront site.

 2.    Industrial: New demands for e-commerce distribution centers
Demands for faster shipments in online sales, and massive increases in e-commerce business is causing companies that have large fulfillment centers to rethink location. Previously, online retailers chose industrial warehouses in lower-cost areas outside of population centers. Today, there’s a new demand for large commercial space closer to metro areas in order to quickly and efficiently store and ship commodities to customers, according to Transwestern. These companies want better access to various modes of transportation, such as trucks, rail, airfreight and even seaports. Real estate pros should identify sites with access to these amenities, as well as spaces that offer specific productivity and operation efficiencies that can help clients increase net operating income.

3.     Multifamily: Micro-unit apartments in urban markets
As renters flock to urban centers for the live-work-play lifestyle, entry-level lease rates are becoming unaffordable for many recent college graduates, service workers and young professionals, according to Transwestern. One way of providing more affordable living space is through micro-unit apartments. The Indie Apartments in Austin, Texas, for example, include 138 apartments – 350-square-foot studios and 520-square-foot, two-bedroom units – and commercial restaurant space on the ground floor.