Top 10 Worries for the Real Estate Industry in 2013 | Commercial ...

Based on the 2013 Emerging Trends in Real Estate survey, conducted and published by ULI and PriceWaterhouseCoopers, here?s a list of the Top 10 Worries for the Real Estate Industry in 2013:

10. European financial instability

9. Federal fiscal deficits/imbalances

8. Construction costs

7. Refinancing

6. Tax policies?

5. Global economic growth

4. Income and wage change

3. Vacancy Rates

2. Interest Rates

1. Job Growth

Also, be sure to check out our previous Top 10 based on this ULI survey, Top 10 CRE Trends in 2013.

This ranking comes from a survey of U.S. real estate professionals?investors, developers, operators, and so on?asking respondents to name their greatest concerns in three different categories: Economic/Financial, Social/Political, and Real Estate/Development.?Each of the issues in these three categories received a score between 1 and 5. The most popular choices appear above.

Interesting side note: Social/Political issues like terrorism/war, social inequality, and global warming received far lower scores than such issues as interest rates and tax policies. ?I don?t have a joke or glib remark to follow that; it?s just an observation.

Of course, there?s a lot of overlap among these issues. Job growth goes hand-in-hand with numerous other concerns, whether general economic matters or specific real estate concerns.

In light of these issues, it isn?t too difficult to guess how the real estate industry will proceed next year. We can expect further demand and high activity in the core markets, and certain core neighborhoods that are supported by drivers like a transit hub, large university, or popular commercial district. As far as core markets go, the ULI suggests, it will be far more profitable to develop (or, in most cases, renovate/repurpose) properties than acquire existing product at super-low cap rates.

Unfortunately, these concerns also suggest further sluggish activity in secondary and tertiary markets, but even these markets offer some opportunities in existing properties, as well as industrial and multifamily. As always, the advantage will go to CRE markets with a high volume of technology and energy industry companies.

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Source: http://llenrock.com/blog/top-10-issues-affecting-the-real-estate-industry-in-2013/

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