After attending Urban Land Institute’s recent Recreational Development Panel Discussion in Phoenix, it’s clear that forecasting the future real estate markets is a hot topic in the industry. The panel was consistent in their findings: the economy has made significant improvements, but there is still a long way to go.
Panel speakers reached consensus that we have definitely reached the bottom in many markets; however, there are some areas of the country that will continue to have moderate depreciation before full stabilization occurs.
Unfortunately the country is still contending with challenges due to housing foreclosures and the lack of growth in the job market. However, moving towards 2012 and 2013, the panel is more optimistic, anticipating a surge in activity due to changing market conditions.
With a lack of new development over the past 5 years, new home inventory is extremely low. The real estate down cycle has become one of the longest in history, and buyer’s having been waiting it out. The resulting pent-up demand will result in a dramatic rise in the new home sales in our future. Buyers have been waiting in the wings for the “right time” to buy, and they have been sitting on the fence. Once they are convinced of the rising market, they will most likely jump back into the market at that same time. Demographic trends also add to the optimistic forecast, as 77 million baby boomers are reaching age 65 and will be in the market for retirement homes. Determining factors of this market will include: geographic location, affordability, ownership maintenance, access to health care and lifestyle amenities geared towards health and fitness.
Developers who are prepared to deliver the right product at the right price will capitalize on the surge in demand. The emerging market represents an unprecedented opportunity for visionary developers.