Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
This article is based on my reading and interpretation of the Price Waterhouse Cooper (PWC) Real Estate 2020 – Building the Future Report / forecast. So some of it is my opinions based on what I have read. PWC appear to be saying in the report that the future of real estate is going to include an explosion of people and that they will be going to places where they want to be. They discuss the fact that popular large Cites in the World and in the US are likely to become mega-cities over the next several years, and popular secondary cities will likely become large-scale cities. There’s just no arguing the fact that the population curve is now aimed up at an ever-increasing slope and that increasing population is one of those trends that will change everything.
PWC has looked at the World and to some extent they see more movement in developing countries than we will likely see in the developed US, but we are all on the same World population growth path. So there with be many more people, an aging population and as always there will be limited resources.
Many people think that the growth of the population in their city is already out of control. Traffic is increasing in many and it won’t take much time before it completely snarls the roadways with automobiles in some places. But let’s face it, you can’t stop the swarm, people are going to overrun many cities that they want to be in, and many cities want them to come. For cities it’s simple math, you either grow or you stagnate and die.
If you personally want to be around fewer people you had better start looking for a rural community, if you really want a lot fewer people around maybe you need to look at places up north in snow country. If your plans are to stay in CA, NV, AZ, NM, TX, LA, AL, MS, FL or anywhere popular that is also warm you may be surprised with the growth that’s likely coming your way.
Smaller houses, apartments and condos are anticipated for growing populations with an increasing number of older people who will also be seeking them. Energy prices are anticipated to increase significantly and higher energy prices will increase pressure on housing design and size. The desire of the dwindling baby-boomer generation to own 3,000 to 5,000 square foot (SF) homes will no longer be seen as practical by many as competition for energy resources ramps up. PWC predicated decreasing demand for larger homes over the next several years.
Demand will increase for much smaller 800 SF to 1,500 SF spaces. It’s hard to imagine that people will have a preference for smaller spaces, but it’s just going to become a fact of life for many.
A dramatic fact presented in the PWC report was noted on Page 15 regarding the average annual housing completion numbers for the period between 2012 and 2025. The US is expected to have 1,485,966 housing completions during that period while China is expected to have 9,326,381 housing completions and India is expected to have 11,507,476 housing completions.
Sustainability ratings are expected to take hold in “advanced economies” by 2020 per the PWC report. Some expect a significant “green premium” will be paid for buildings that that are rated highly. It has been reported that many new employees want to work in sustainable buildings and that their preferences will eventually increase future rents and thus corresponding building values.
The upcoming, digitally savvy generation will soon become dominant and they will continue to be heavily influenced by the social networks and social preferences that they make. The strong influence of social groups expected in the future is not alien to the older generation but I believe that technology will transform it quickly to an almost unrecognizable state of affairs. What “everyone is doing” will in many cases instantly become the goal of many others in their social group.
The future of real property values will in the future have a lot more to do with the perceptions of those influencing social groups and thus buyers. While society today influences the success of a real property project the focus of a social group on a “liked” development will likely be much stronger.
For more appraisal information contact Glenn J. Rigdon MA, MRICS, IFAS, ASA who is a Las Vegas / Henderson Nevada based broker and appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas (http://www.appraiserlasvegas.com), or http://www.horizonvillageappraisal.com, or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at http://www.linkedin.com/pub/glenn-rigdon-ma-mrics-asa/1a/30b/879/
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