• The residential housing market is stalling; and perhaps non-existent for homes priced in the top third of the market;
  • Public funds for roadway expansions are going to become harder to come by;
  • There is and will continue to be an over supply of low density fringe suburban homes (exurban);
  • Baby Boomers and their children are showing a desire to downsize and live in walkable closer in communities with mass transit options, with no let up in sight at least through 2025; 

The Brookings Institute published a well reasoned article recently entitled The Next Real Estate Boom.  The authors raise the above and several other facts which lead them to the conclusion that inner ring communities and suburbs will see a quicker stabilization of real estate prices and development, long before the exurban areas of our metropolitan markets.  

So, how can developers and real estate professionals respond to these trends ?  

  • Advocate for more and better public transportation options;
  • Find ways to promote alternative energy and power options (charging stations);
  • Enhance walkable communities through intelligent residential and commercial development.

One statistic mentioned by the authors is that when a household eliminates a car from its budget the household can afford an additional $100,000 in mortgage expenses.  This statistic alone should be enough to motivate governmental bodies to create incentives for taking advantage of these trends.  According to the authors, transportation policies drive development activity.  

 

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Brad Kaplan

Brad assists Owners, Operators and Receivers of Hotel, Office and Industrial properties with their Real Estate, Finance, Leasing, Construction and Organizational challenges; specifically, negotiating and drafting hospitality, purchase, sale, financing, leasing, construction, franchise and management agreements. He has in the past and presently…

Brad assists Owners, Operators and Receivers of Hotel, Office and Industrial properties with their Real Estate, Finance, Leasing, Construction and Organizational challenges; specifically, negotiating and drafting hospitality, purchase, sale, financing, leasing, construction, franchise and management agreements. He has in the past and presently serves as general counsel and national real estate counsel to several domestic and internationally based public and privately held companies. Brad represents foreign businesses doing business in the United States and U.S. businesses doing business abroad; and is a former Chairman of World Services Group (www.worldservicesgroup.com) an international consortium of legal and other professionals. Brad has achieved the highest rating, AV Preeminent®, from Martindale-Hubbell®. He is an active member of the Illinois Bar and maintains an office in both the firm’s Cincinnati and Chicago offices. Brad is the editor of the Real Estate Advisor Law blog, a tool that highlights articles and observations of Ulmer & Berne attorneys on various trends and opportunities affecting the commercial real estate and construction industry, and is a frequent speaker on internet and social media issues.