This is part 5 in a multi-part series about the latest Emerging Trends in Real Estate® report, an annual forecast on the outlook of real estate finance and capital markets, investment and development trends, property sectors, metropolitan area, and other issues affecting the industry in North America. Check out the earlier installments here.
Perspectives on Regions
As secondary markets around the nation continue to successfully emerge, the outlook for all U.S. regions continues to improve. In general, the overall feel is positive with all markets continuing on the positive trajectory that was reported in 2015, with few exceptions in property types.
There are 20 markets that make up the West region, with four finding spots in the national top ten, and eight of the top 20. The multifamily sector is the highest scoring property type in the region, and a number of areas, including San Jose, Orange County, San Diego and Honolulu, are expected to easily outperform the regional average. After multifamily, survey participants like single-family housing, retail, hotel, industrial and office markets in the West. Markets expecting to outperform the regional average include:
- Single-family housing: Seattle, Tacoma, San Francisco, Los Angeles, Seattle, and San Jose
- Retail: San Francisco, Los Angeles, Seattle, and San Jose
- Hotel: San Francisco, Los Angeles, Seattle, San Jose, and San Diego
- Industrial: Los Angeles, Denver, the Inland Empire, Salt Lake City, and Portland
- Office: Seattle, Los Angeles, Portland, San Francisco, San Jose, Phoenix, and San Diego
The average local market outlook score for the West region is the highest of all four regions, with the top local outlook scores for 2016 going to Seattle, San Francisco, Denver, San Jose, and Salt Lake City.
The number-one market in the country, Dallas/Fort Worth, is located in this region, as well as seven of the top 20 markets. The housing market is favored by survey respondents, with the single-family sector receiving the highest average score of all property types. The markets in the South region that are expected to outperform the national average include Dallas/Fort Worth, Austin, Houston, and Charlotte. The second-highest-scoring property type in the region is multifamily, with strong markets in Dallas/Fort Worth, Austin, Orlando, Nashville and Cape Coral/Fort Myers. Apart from housing, survey participants like industrial, retail, hotel, and office outlooks in the South. Markets expected to outperform the regional average include:
- Industrial: Dallas/Fort Worth, Atlanta, Charlotte, and Nashville
- Retail: Austin, northern Virginia, Dallas/Fort Worth, and Nashville
- Hotel: Charlotte, Raleigh/Durham, Dallas/Fort Worth, and Atlanta
The average local market outlook score for the South region is second highest for all all four U.S. regions. The highest local outlook scores for 2016 include Dallas/Fort Worth, Austin, Charleston, Nashville, Miami, Raleigh/Durham and Palm Beach.
There are 13 markets that make up this region, and collectively they rank third out of the four U.S. regions. The highest-ranked market is Minneapolis/St. Paul, the only Midwest market in this year’s top 20. Industrial markets received the most favorable outlook from survey respondents, who also like multifamily, office, retail, single-family housing and hotel sectors in the Midwest region. Markets expected to outperform the regional average include:
- Industrial: Detroit, Chicago and Indianapolis
- Multifamily: Indianapolis, Chicago, Minneapolis/St. Paul, Columbus, Cleveland, and Cincinnati
- Office: Chicago, Minneapolis/St. Paul, Cleveland, and Indianapolis
- Retail: Minneapolis/St. Paul, Indianapolis, and Chicago
- Single-family housing: St. Louis, Columbus, and Kansas City
The average local market outlook score for the Midwest region is the third highest out of the four U.S. regions, and the top local scores for 2016 include Columbus, Minneapolis/St. Paul, Madison, Indianapolis, and Kansas City.
The 13 markets that make up this region rank fourth out of the four U.S. regions represented. The highest-ranked market in the region is Boston, coming in at 13 the top 20 national list. Manhattan was the only other Northeast region market to make the list. Survey participants like the retail sector in the Northeast the best, followed by multifamily, industrial, single-family housing, hotel and office. Markets expected to outperform the regional average include:
- Retail: Manhattan, northern New Jersey, Brooklyn, Pittsburgh, and New York City’s other boroughs
- Multifamily: northern New Jersey, Manhattan, Boston, and Brooklyn
- Industrial: northern New Jersey, Baltimore, Boston, Manhattan, and Pittsburgh
- Single-family housing: Boston, Philadelphia, and Pittsburgh
- Hotel: Boston, Portland, Maine, Baltimore and Pittsburgh
- Office: Boston, Manhattan, Brooklyn, and Pittsburgh