Finally, we are emerging out of the dark hole of the housing crash. In 2013, the overall outlook for real estate is positive. According to the report Emerging Trends in Real Estate 2013, written by Urban Land Institute and PricewaterhouseCoopers, the slow-paced real estate recovery should continue through the coming year. Modest gains in leasing, rents and pricing will be experienced from coast to coast. Every sector of the real estate market is expected to see a drop in vacancy rates, due to the influx in recent job creation. Real estate is expected to outperform fixed-income investments in the current low interest rate environment.
The recovery of the housing market is slow, but after several years of frustrating numbers, we’re due for improvements. And although we’re not entirely out of the water, real estate is predicted to outperform US stocks and bonds in 2013. Real estate is thus once again becoming a solid and dependable investment. According to Emerging Trends in Real Estate 2013, “Low interest rates give the real estate industry breathing space, and money ‘pours in from overseas’ seeking refuge. Real estate assets, meanwhile, continue to command attractive spreads over fixed-income investments and offer considerably more stability than stocks.”
One of the major trends this year is investing in green infrastructure and technology. Studies indicate that tenants are willing to pay more for green buildings. With the right investments, these kinds of cutting edge projects can attract new tenants and guide your company into the future of real estate.
It is looking like an opportune time to get into the single- or multi-family housing market, as well. Studies show large capital investment happening in the next year in these sectors.
There are additional reasons to be optimistic about real estate investing, as well. For example, you can expect a surge in demand for rentals from many of the Gen Y demographic who have been living with their parents the past few years but are eager to set out on their own as they finally find new jobs. According to Calvin Schnure, an economist at the National Association of Real Estate Investment Trusts, there are 3-5 million of these types of individuals that are expected to move into their own apartments, and they represent a pent-up demand for rentals that’s twice as big in percentage terms as the country has ever seen.