FOR IMMEDIATE RELEASE
AUSTIN EARNS NO. 2 RANKING IN URBAN LAND INSTITUTE’S
ANNUAL FORECAST OF U.S. MARKETS TO WATCH
AUSTIN, Texas – October 15, 2020 – The Urban Land Institute (ULI), an education, research and resource organization focused on providing leadership in the responsible use of land and creating and sustaining thriving communities, has released its annual Emerging Trends in Real Estate® 2021 forecast, and Austin has maintained its well established reputation with the No. 2 position in the ranking of national markets to watch.
This year’s rankings highlight the evolving trends shaping the real estate industry. The report explores how Covid-19 accelerated many existing trends like retail footprint reductions, while it spawned new ones such as an increased focus on social justice and health and wellness, and stopped others in their tracks like the appeal of big cities.
Since 2010, Austin has ranked seventh or higher in each Emerging Trends in Real Estate® report. The capital city earned the No. 1 spot in last year’s report and ranked 6th in the 2019 forecast, 2nd in the 2018 forecast and 1st in the 2017 forecast. Dallas-Fort Worth was the only other Texas city to make the Top 10 Markets list, coming in at No. 4.
ULI Austin will host an Emerging Trends in Real Estate event on Tue., Dec. 1, with timing and location details to be announced at a later date. Guests will hear national evaluation and insights from one of the report’s co-authors, after which a local panel will provide a unique perspective on the high-level results.
Austin earned the No. 2 spot on this year’s list due to its status as an “18-hour city,” making it a popular in-migration destination due to lifestyle, culture, and employment opportunities. While not necessarily an inexpensive market, it is often more affordable than the establishment markets, from which it draws many newcomers. The dynamic economies of Austin and similar markets such as Charlotte, Denver, Minneapolis, Nashville, Portland, Raleigh/Durham, Salt Lake City, San Diego and Seattle, make them popular with developers and investors.
In addition, the report noted Austin’s success in managing suburban growth. The city has continued to see a surge in the suburban office and homebuilding sectors. With a greater emphasis on health and safety, the need for lower density environments and more space has only grown. Remote work and higher taxes in large cities due to declining tourism and business tax revenue are contributing to the shift away from an urban core.
Other top trends from the report include:
The Economy (and Real Estate Sector) Hang On: Though real estate capital markets have settled, most anticipate overall real estate prices to fall 5-10% as income is curtailed for several years.
Exodus to the ‘Burbs: Covid-19 is accelerating suburban growth, especially in the Sunbelt markets.
Work from Home Changes Office Outlook: The rapid shift to widespread remote work is considered the ultimate test of digital transformation in the workplace.
The Essentials: Safety and Wellness: 82% of professionals agree that health and wellbeing will become a more important factor across all sectors of real estate. The industry will need to meet higher standards of cleanliness and safety to make tenants and customers feel safe and attract them back – particularly at hotels, office buildings, retail and restaurants.
Social Justice and Racial Equity Now: The industry must do more to address social and racial inequality in the US. Nearly half (48%) of respondents disagree that real estate understands how past policies and practices have contributed to systemic racism.
Stores Still Matter: The next few years promise to be “retail’s great transition period,” as demand for larger retailers and department stores dwindles in favor of discount stores, fast fashion and online retail.
Affordable Housing Remains a Major Issue: Covid-19 has only accelerated the housing disparities in the US as many low-income workers experience unemployment and possible eviction.
The Great Fiscal Challenge: Real estate taxes, generally the largest source of local government revenue, are likely to decline as hotels and shopping centers (and potentially offices) lose tenants and value.
Now in its 42nd year, Emerging Trends in Real Estate®, undertaken jointly by PwC and ULI, is one of the most highly regarded annual industry outlooks for the real estate and land use industry. It includes interviews and survey responses from 1,687 leading real estate experts, including investors, fund managers, developers, property companies, lenders, brokers, advisers and consultants.
About ULI Austin:
The Austin District Council of the Urban Land Institute was founded in 1994. Today, the Austin District Council includes more than 900 Austin-area professionals in the planning, architecture, design, engineering, investor, landscape, lender, legal, construction, communication and government industries, involved in every sector of real estate development, from residential and retail to commercial and hospitality. ULI is known for its topical monthly breakfasts, which feature local and international experts on topics important to the community’s growth and prosperity. For more information, visit Austin.ULI.org.