With a new year just around the corner, Sacramento’s Urban Land Institute chapter had a forum Thursday morning at the Sutter Club in Sacramento looking at what the leading real estate trends in 2017 will be. Here’s what’s expected:
1. With little data in the macroeconomic market to suggest real estate is overheating, the market may be moderating on its own, said Kathleen Carey, chair of ULI’s Emerging Trends group. Supply of new development is below average, and the number of transactions is dropping.
2. But optimism is still strong. For 2017, 81.3 percent of those surveyed nationally in real estate believe the outlook is good or excellent, Carey said. In a quick show of hands at Thursday’s forum, the percentage among Sacramento’s real estate industry looked even higher.
3. Construction labor scarcity is a nationwide trend, driven partially by a gap between new workers joining the workforce and baby boomers retiring. Somewhat related is a shortfall of 7 million new homes nationally since the recession, and an increasing need for infrastructure of all kinds.
4. During a panel discussion, Kevin Carson of The New Home Co. and Katherine Bardis of Bardis Homes said the two biggest buyer groups, millennials and baby boomers, also want similar things from homes: walkable neighborhoods, no wasted space and especially for baby boomers, no stairs.
5. Multifamily broker Marc Ross of CBRE said during the panel discussion that Sacramento’s apartment rent surge shows no signs of abating for the next two or three years, with relatively few units being built and a lack of housing supply keeping many people renting rather than buying. “The reality is, it’s all hot,” he said when asked about which submarkets are doing best.