Smaller, ‘Younger’ Cities Poised for Growth
Smaller secondary cities are poised for growth, reported PwC US, New York, and the Urban Land Institute, Washington, D.C.
“The growing interest in smaller cities by real estate investors is influenced by their relative affordability, coupled with a concentration of young, skilled workers,” said PwC Partner Mitch Roschelle. “The diverse, robust economies of these smaller cities make them very desirable to investors.”
The Emerging Trends in Real Estate 2018 report said Seattle currently has the best market outlook due to its job opportunities, diverse economy and young, educated workforce. The city–which ranked fourth in last year’s report–ended Texas’ recent domination. Austin’s market outlook fell to number two and Dallas/Fort Worth slipped to number five.
Houston, which had the best market outlook as recently as 2015, dropped to No. 60. ULI and PwC attributed the drop to energy industry disruptions.
Salt Lake City, Utah, (No. 3) and Fort Lauderdale, Fla., (No. 6) entered the top 10 for the first time “as investors look to replicate the level of success found in Denver and Miami with their competitive costs of living and high quality of life,” the report said. Salt Lake City represents the smallest market ever to make the top 10.
Manhattan experienced the largest year-over-year negative move as it fell to number 46 in the ranking, largely due to the high cost of assets and construction over-saturation. Many surveyed respondents cited “too many cranes in the skyline.”
The top markets in Emerging Trends in Real Estate 2018 include Seattle, Austin, Texas, Salt Lake City, Utah, Raleigh/Durham, N.C., Dallas/Ft. Worth, Texas, Fort Lauderdale, Fla., Los Angeles, San Jose, Calif., Nashville, Tenn. And Boston.
ULI Global Chief Executive Officer Patrick Phillips called the trend of smaller markets displacing larger ones as investment hubs “a new course” for urban development. “These cities are positioning themselves as highly competitive in terms of livability, employment offerings and recreational and cultural amenities,” he said.
