The market popularity of residential space in less dense parts of the country will become increasingly apparent next year as a result of the Covid-19 outbreak, says a comprehensive new report.
According to Emerging Trends in Real Estate 2021, published by the Urban Land Institute, homebuyers in the next year are going to be more interested in affordable housing largely in suburban locations.
This means that a movement first tracked by demographers several years ago of young people moving out of urban cores and into the suburbs is only going to increase in 2021.
“The next three to five years could be difficult as demographics favor suburban locations, and restrictions on public transit, office and retail/restaurant density, and live entertainment—and individuals’ concerns about them—make big city life less appealing,” notes the study.
That same demographic is more interested than ever in neighborhoods with plenty of open spaces and parks.
At the same time the ULI study is forecasting a growing demand among retailers for smaller spaces, a trend that may nicely dovetail with the need for mall owners to find new tenants.
Those owners, suggests the study, will increasingly prove willing to break down the spaces left vacant in the wake of closed department stores such as Sears and JC Penny in order to accommodate the more modest needs of newer retailers.
The study, done in conjunction with the tax and consulting service PwC, is based on information provided by more than 1,600 leading real estate experts, and says that overall, Sunbelt cities are likely to prove more popular in 2021 than their counterparts in the North.
Noting that while properties with a large public use component such as sports and entertainment venues are proving less appealing because of the pandemic, “logistics facilities and data centers are generally thriving.”
The study also looks at the future of the urban office, noting that because of the pandemic, many companies have adjusted to having staff working remotely and may keep that practice intact long after Covid-19 has finally died.
“On the other hand,” suggests the study, “the belief is strong among our interviewees that offices provide an amenity-rich environment that fosters communication, creativity, and collaboration that cannot easily be replicated in a workforce entirely ensconced in their homes.”
By Garry Boulard
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