Boston, MA (July 10, 2018) —Donald P. Bouchard, CRE, Senior Vice President, Lincoln Property Company today shared the 2018-19 Top Ten Issues Affecting Real Estate™—the issues and trends most likely to impact commercial and residential real estate. Bouchard is a member of The Counselors of Real Estate®, the global professional association which annually creates this list. Members of The Counselors organization are recognized property experts who provide specialized, objective real estate advisory services to clients.
Bouchard, a credentialed Counselor of Real Estate (CRE® since 2002), said that for the first time the list is categorized by Current and Longer-Term impacts.
Current Issues Impacting Real Estate
Topping the Current Issues list is the cost of money—Interest Rates and the Economy. As interest rates rise, the commercial and residential real estate markets are experiencing decreasing demand for commercial property, and higher home mortgage rates. Rate increases also limit value appreciation for commercial real estate and make housing less affordable.
Politics and Political Uncertainty was a close second on The Counselors’ list. Tax reform and policies enacted to change the balance of trade with other countries impacts jobs, incomes and property of all types, commercial and residential.
Other current issues include:
- The lack of Housing Affordability across nearly every income bracket with the exception of the wealthiest households.
- Effects of Generational Change and Demographics—for the first time in more than half a century, there are four distinct groups exerting influence on both commercial and residential real estate–aging Baby Boomers, a similar number of Millennials, and the smaller groups on either side of Millennials (Generation X, now mostly middle-aged), and Generation Y, including students and those in their early 20s.
- E-commerce and Logistics—the growing practice of online shopping is affecting the retail sector with pressure on providing convenience, selection and fast delivery times, while impacting warehousing and infrastructure with increased demand.
Longer-Term Issues Affecting Real Estate
Infrastructure leads the list of longer-term issues—roads, bridges, airports, water and sewer lines, electricity, even public transit, all necessary to sustain and expand cities and communities—are rapidly deteriorating. U.S. infrastructure was given a D+ rating in the American Society of Civil Engineers 2017 Infrastructure Report Card. As much as $4.5 trillion is estimated by that organization to improve critical infrastructure by 2025.
Disruptive Technology ranked second of the longer-term issues. Examples include advanced robotic manufacturing and warehousing; driverless cars and trucks; the extensive availability and utilization of personal and transactional data (which enhances all kinds of business decisions), “smart” building technology that enables efficiency; global connectivity; automated business processes; and information protection through cybersecurity.
Other longer-term issues include:
- Natural Disasters and Climate Change—projected to result in property and environmental damage from events such as severe storms, wildfires, floods, earthquakes, volcanic activity, and rising sea levels.
- Immigration—if reduced by law, will have a negative impact on new housing starts and home purchases as well as worsen the current skilled labor shortage in the U.S.
- Energy and Water—natural resources important to property and quality of life, yet threatened by not only environmental damage but also by entangling state and local regulations which complicate development; there are no national regulatory standards.
- Interest Rates & The Economy
- Politics & Political Uncertainty
- Housing Affordability
- Generational Change/Demographics
- E-commerce & Logistics
- Disruptive Technology
- Natural Disasters & Climate Change
- Energy & Water
- Construction Costs
- Tax Cuts
- Societal Leadership
View the full list of issues and trends with explanations and interpretations on The Counselors of Real Estate’s website.
The Counselors of Real Estate is known for thought leadership, extraordinary professional reach (more than 50 real estate specialties are represented by its member experts) and objective identification of the issues and trends most likely to impact real estate now and in the future. The issues in the annual Top Ten Issues Affecting Real Estate list are an unbiased assessment of the most critical factors impacting real property.
About The Counselors of Real Estate
The Counselors of Real Estate is an international consortium of recognized problem solvers who provide reliable, state of the art advice on real property. Membership is extended by invitation and includes principals of real estate, financial, legal, and accounting firms as well as developers, economists, futurists, and leaders of Wall Street and academia. Counselors of Real Estate endowed the MIT Real Estate Center, brought parking garages to China, developed a master plan for the Philadelphia Public Schools and valued Yale University and The Grand Canyon. Award of the CRE® Credential attests to the exceptional real property experience and decision making skills of the recipient. Counselors reside in 20 countries and U.S. territories.