For the second year in a row, Austin out shines Dallas-Fort Worth in a long-running real estate beauty contest.
But the real star of the annual Emerging Trends in Real Estate report is Raleigh-Durham, N.C., which was voted the top metro market to watch in the year ahead. The widely anticipated report—in its 42nd year—quizzes hundreds of real estate pros from across the country to rate the best property markets for the year ahead. The study is done by the Urban Land Institute and PriceWaterhouse Coopers.
DFW was ranked first two years ago in the poll. And last year Austin took the lead. DFW has moved up from sixth to fourth place in the newest poll that asks real estate execs where will be the hottest places to buy and build in 2021.
The emphasis for next year is smaller urban markets—not mega coastal cities.
“Raleigh/Durham, N.C., for example, is nicknamed the ‘Bay Area of the East Coast,’ due to a surge in technology jobs and the area’s reputation as an education mecca,” researchers said. “Homebuyers will look for suburban locations with low taxes, affordable housing, auto-oriented transportation, and good job prospects.
“Appearing first in the 2020 report and now ranked second for 2021, Austin, Texas has continued to see a surge in the suburban office and homebuilding sectors.”
More than half of the highest rated markets for 2021 were previously considered secondary cities for real estate. The impact of the COVID-19 pandemic has rebooted thinking about all types of properties.
“Covid-19 is accelerating suburban growth, especially in the Sunbelt markets,” researchers in the report say. “With a greater emphasis on health and safety, the need for lower density environments and more space has only grown.
“Remote work and higher taxes in large cities due to declining tourism and business tax revenue are contributing to the shift away from an urban core.
“Cost-conscious companies will gravitate toward cities that are business-friendly and low cost with large, growing workforces.”
The forecast calls for overall real estate prices to drop by 5% to 10%. The biggest declines will be in retail and hospitality properties. Industrial buildings, data centers and single-family homes are expected to continue to gain in value.
More than 80% of real estate execs surveyed said health and wellness will become a more important factor across all sectors of the property market.
“In the near term, our suburbs will benefit from new growth spurred by shifting demographics and changes to living and working patterns resulting from the COVID crisis,” W. Ed Walter, Global CEO of Urban Land Institute, said in a statement. “Our cities will have the opportunity to respond by reimagining their public realm, building more resiliently, and reinventing assets, such as retail, that were already struggling before the pandemic.
“As an industry we have the opportunity to strengthen by truly embracing diversity and tackling the challenges faced by our communities.”
More than 70% of the 1,600 real estate brokers, developers, consultants, lenders and other professionals polled for the Emerging Trends report said social justice and racial equality issues have more importance to their business.
“Now, more than ever, the real estate industry has the chance to take the lead in using planning and development skills and investment capital to reshape our work and lifestyle environments,” Byron Carlock, PwC Partner and U.S. Real Estate Practice Leader, said in a statement. “These tools can be used to address societal issues of safety, green space and racial equity.”
Top Markets for Real Estate in 2021
Cities ranked for the top overall prospects in the annual Emerging Trends in Real Estate report. Last year’s rank in parenthesis.
1. Raleigh-Durham (2)
2. Austin (1)
3. Nashville (3)
4. Dallas-Fort Worth (5)
5. Charlotte (4)
6. Tampa-St. Petersburg
7. Salt Lake City
8. Washington, D.C.
9. Boston (8)
10. Long Island, N.Y.
Source: The Dallas Morning News