The latest survey of US property trends for the coming year finds that the housing market is well on the way to recovery. It also puts the market in 75 locations under the microscope and reveals that Houston is the number one property market to watch in 2015.
Emerging Trends in Real Estate 2015, co-published by the Urban Land Institute and PWC, takes an in-depth look at all sectors of US property. One of the most highly regarded forecast reports for the industry, the report takes a look at the market as a whole before examining urban areas in the US in detail.
Property Market Fundamentals
As far as the residential sector is concerned, the report concludes that the years of the property bust are now firmly in the past. “Housing seems to be putting the excesses of the bubble and the ensuing collapse behind it,” says the report before adding that the market appears to be returning to “the classic principles of supply and demand”.
The authors of the report recognise that there’s currently a shortfall of around 9 million properties in the US, but despite this huge shortage, the market looks very healthy. “Shady mortgage deals” and inflated house prices are no longer part of the equation and the market can now expect moderate price rises based on buyers’ ability to pay. The residential sector should experience considerably more confidence this year, a trend the report describes as extremely positive for the US economy as a whole.
One of the major factors influencing US property investment is employment and those interviewed in the report are emphatic that job growth is the most important issue for real estate. This together with an increase in population forms the backbone of successful investment since markets bringing the two together are sustainable.
The survey finds that rental property is still an important force in the US market despite low interest rates and affordable homes. Renting in preference to buying will remain the most popular option among the so-called Millennials, Americans born between 1981 and 1995. The report states that rental properties will continue to appeal to this generation “spooked by what happened to their homeowning parents”.
Houston Property Top Position
Emerging Trends in Real Estate 2015 pinpoints 20 top markets to watch this year by looking at three fundamentals in these areas – investment, development and homebuilding. Texas, mainly because of the huge recent employment and population growth in the state, dominates the ranking with three out of the top five positions.
Houston takes first position scoring the highest for both investment and development. The report finds the Texan city offers “a significant amount of investment opportunities” with expectations high for all sectors of the property market.
This is due to the strong energy sector in the city driving market growth and activity in the Houston property market. The report finds that all property sectors present interesting investment opportunities and for the first time, global investors are looking seriously at Houston. Survey respondents based in Houston claim that property market conditions in Houston for 2015 are excellent and award the city an almost perfect score of 4.7 out of 5.
Source: Urban Land Institute