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Top 10 issues affecting US real estate

(CHICAGO) – June 11, 2014 – Energy, jobs, and the far-reaching influence of the Millennial generation are the issues that will have the most significant impact on real estate both near-and long-term, according to The Counselors of Real Estate® organization, which today released its official 2014 Top Ten Issues Affecting Real Estate, a list it compiles annually.

The announcement was made by Hugh F. Kelly, Ph.D., CRE, 2014 chair of The Counselors of Real Estate, the invitation-only professional association for expert real estate advisors, during the opening address at the National Association of Real Estate Editors annual conference in Houston.  Dr. Kelly is clinical professor of real estate at New York University’s Schack Institute of Real Estate.

“The list reflects growing economic and political turmoil, changing demographics and the lifestyle choices of an emerging generation, rising energy independence in the United States and a strengthening job market fueled in part by massive changes in the delivery of health care,” Dr. Kelly said.

The Counselors of Real Estate organization is known for thought leadership, extraordinary professional reach (more than 50 real estate specialties are represented by its member experts) and objective identification of the issues and trends most likely to impact real estate now and in the future.

1.  Energy:   The U.S. is becoming increasingly energy independent.  Changes in U.S. energy production are impacting jobs, income growth and the quality of life – key determinants of real estate value and successful investment.  The mix of energy types produced–crude oil, natural gas and alternatives such as wind and solar energy–provide investment opportunity and risks. The impact of energy

Energy is the number one issue affecting real estate.

Energy is the number one issue affecting real estate.

production changes varies by state and community depending on access to resources, regulatory trends and other factors; however, many communities involved in increased energy production are experiencing a jobs boom with related housing and services growth for workers.  Uncertainty in the energy sector created by dueling reports from environmentalists and the oil and chemical companies provide investors with opportunities.  The potential for relatively low natural gas prices (now one-fifth the cost of Europe and Asia) in combination with other factors has improved the outlook for manufacturing and could significantly advance the expansion of rail, shipbuilding and related industries should gas exports increase. 

2. Jobs:  The job market is expected to remain strong in 2014.  If the U.S. economy grows by the forecasted 2.8%, the number of new jobs likely to be added will continue to number 200,000 to 250,000 per month.  Strong job creation is expected to have a positive impact on the residential and multifamily sectors. The types of jobs being offered should move up the quality scale, raising average wages and boosting purchasing power for consumers as well as the ability of landlords to extract rents.  Demand for office space may also increase, but employers continue to pare per-employee space requirements, carefully considering space needs because of changing technology and noting the younger workforce’s preference for living in cities and working in open format workspaces.   Job reductions, however, in retail and branch banking, largely due to changes in consumer behavior and online technology, will take a toll on housing, may benefit the apartment sector and could negatively impact commercial real estate. Service sector jobs may absorb some of those displaced.  Communities and neighborhoods that once valued big-box stores may be well served by courting schools, physical therapy services and even independent and assisted living facilities for senior citizens drawn to a retail/lifestyle/entertainment environment.

3. The Millennials: The Millennial generation, born after 1980, represents 27% of the U.S. adult population–and their influence is far-reaching.  This group is the first to fully embrace new technology, including the Internet, eCommerce, mobile communications and social media.  Their practices are poised to change the way society interacts, receives information, shops and lives.  Millennials show a strong preference for urban living and working, value mass transit, and “work, live, play” communities where residents of all ages, ethnicities, and income brackets live side by side.  They carry high levels of student loan debt, drive fewer cars, marry later, and often choose smaller living spaces than the typical homes in the suburbs that appealed to their parents a generation ago.  Their preferences are already having an effect on both city and suburban residential, multifamily, office and retail sectors.

4. Healthcare: A wide range of newly constructed healthcare facilities will be needed to treat the large numbers of newly insured Americans under the Affordable Care Act.  Providers will increase market share by constructing specialized consultative care or treatment facilities, many in non-urban locations, providing wide-ranging services at a considerably lower cost.  Some big-box stores are being converted to house clusters of medical offices in “medical malls.”  Considerable consolidation of hospital and healthcare organizations is

Healthcare facilities will be needed to treat the large numbers of newly insured.

Healthcare facilities will be needed to treat the large numbers of newly insured.

underway, with an enormous impact on real estate – mergers and acquisitions create both excess properties and an increased demand for updated facilities.  These new entities are building satellite healthcare centers, urgent care and diagnostic facilities.  Pharmacy chains are installing wellness clinics in stores and some large employers are building health clinics within their companies.  All of these factors will spur development of different forms of housing and expanded retail centers, serving not only an aging population but those seeking access to the medical assistance and products to which they are now entitled.

5. Globalization:  In the next five to ten years, expect a remaking of the global supply chain emanating from eCommerce and expansion of the Panama Canal; advancing technolog;, availability and cost of energy; and political strife.  As traditional pathways for goods and materials change – decoupled from political boundaries and increasingly automated – the resulting “efficiency” will potentially cause widespread labor strife from Europe to Asia, and even to the U.S. west coast.   Energy will continue to influence globalization as energy dominance by the Middle East decreases.  More U.S. energy production could disrupt manufacturing activity in Europe and Asia, adding to labor strife and a possible return to protectionism.  Historically, political strife has been the primary impediment to globalization.  Unresolved wars in Afghanistan and the Middle East, the situation in Ukraine, and continued volatility in resource-rich nations, such as Africa, could put globalization into hibernation.    An additional factor is increasing manufacturing technology, which has the potential to revolutionize production, warehousing and purchasing over the next decade.  The reality of 3-D printing technology is perhaps the most significant development, with its ability to produce on-site goods and materials to exact specifications without manufacturing plants or inventory warehouses.

6.  Water:  Global demand for fresh water is projected to exceed supply by 40% by 2030.  While water scarcity is a reality in much of the developing world – where 780 million people have no access to clean water; 2.5 billion have no access to modern sanitation; and over three million die each year from water, sanitation and hygiene-related causes – the U.S. will likely experience serious water shortages as

LAKE MEAD

LAKE MEAD

well.  Aging water infrastructure, droughts (particularly in the southwest) and reduced water deliveries to agriculture have the potential to cause water-related economic problems.  A number of states face severe water challenges; Las Vegas’ Lake Meade, which supplies 100% of the city’s water needs, is projected to have a 50% chance of drying out by 2025.  A 2013 U.S. government report showed that groundwater depletion in the U.S. for the years 2000 to 2008 was nearly three times greater than the average rate of depletion for the preceding 108 years – from 1900 to 2008.  Some future projections project 1.8 billion people living in regions with confirmed water scarcity by the year 2025.  The implications for real estate are enormous – affecting land value, community desirability, future viability and investment.  Consider also that China is home to 20% of the world’s population, but only seven percent of its fresh water.  Water may become a political issue as well as a health issue in a relatively short timeframe.

7.  Capital Markets:  This issue is included in the Top Ten list for the second year in a row.  The availability of capital to commercial real estate from 2014 to 2017 will be vital to the health of the industry.  The enticement of riding a high-yield wave is luring capital back into real estate, with investment in a wide variety of choices, from agricultural land to commercial mortgage backed securities.  A new round of commercial refinancing will begin this year, with an estimated $360 billion in permanent securitized loans needing to be refinanced by year end 2017.  While the sheer numbers are larger than the volume that matured between 2010 and 2012, the quality is different – with much of this wave suburban in nature where there is an oversupply of properties.  Action by the Federal Reserve will affect the market as investors await extraction of Quantitative Easing, scheduled to be completed before year end.  The question is whether or not we are headed for another “bubble.”

8.  Housing:  The housing market appears to be in recovery mode, but home ownership continues to lag.  While Case Schiller reports home prices rising by about 13% over last year, not all areas of the U.S. experience encouraging price increases.  Despite moderate growth in the economy, U.S. Census data reflects the lowest rate of home ownership since 1995.  Credit is again tight, but as the job market improves, home purchases are expected to increase.  The multifamily sector may feel downward pressure caused by transition from renting to buying – at the same time an avalanche of new multifamily units is becoming available as a result of boom development in that sector over the past few years.

9.  Manufacturing:  Robotics, self-service kiosks and 3-D printing technologies are dramatically transforming manufacturing.  The effect on commercial real estate is accelerated at a more rapid and dynamic pace than previously thought, with unintended consequences.   Manufacturers, ports and supply chains are embracing automation to increase efficiency and reduce labor costs – for example, a modern auto or textile manufacturing facility utilizing new technology may employ just 20% of the labor force of a predecessor plant a decade ago.  Robotics applied to retail services and self-service kiosks are replacing workers in call centers, banks, fast food and retail locations, resulting in erosion of the Labor Participation rate and a smaller working population in the U.S.

10.  Agriculture:  Agriculture debt is near all-time lows, which has helped push farmland prices to all-time highs.  Livestock prices are at similar highs with “producing” animal numbers near all-time per-capita lows.  The outlook for land values is mixed, with “more

Passage of the Agricultural Act of 2014 (“Farm Bill”) will help stabilize agricultural returns .

Passage of the Agricultural Act of 2014 (“Farm Bill”) will help stabilize agricultural returns .

productive” farmland, primarily irrigated, expected to show moderate increases.  Ranchland prices are expected to strengthen after lagging behind the feed grain and vegetable producing lands.  High water yielding, irrigated farmland areas such as those found in the northwest Panhandle of Texas, Brazos River Bottom and in Kansas and Nebraska appear to hold long term opportunity, but investors should note the strong land prices in the heartland and Midwest, as valuations cannot continue to increase at the same pace. The recent passage of the Agricultural Act of 2014 (“Farm Bill”) will help stabilize agricultural returns as well as rural property values.  Currently, U.S. consumers spend an average of 6.8% of their income on food, lower than in many other countries, partly due to higher average wages in the U.S. – for example, in Canada it is 9.6%; in Pakistan 50%.

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  1. PaulFelixSchott
    Jun 12, 2014 - 02:39 PM

    Father is that day of wrath near for them that destroy the Earth? KJV Rev 11:18

    Father look another fish near the top of the water Young Eagle soon there will be many as the water goes down.
    Father and when the water is gone what will we eat Young Eagle that is foretold in Revelation 19:17-18
    Have no fear young Eagle, those who are faithful to our Father in Heaven to the end will be saved.

    Father and the wicked and lost Young Eagle Most of them will die in the desert because they did not believe
    and were not faithful as did more then 3,000 years ago.

    Satan’s Sin City “Las Vegas” very soon to die like a fish out of water.

    World Leaders Pay Close “ATTENTION”.

    This Planet Earth Cannot And Will Not Support Life As We Know It Without Its FOREST.
    Soon all will take note to the sounds and rumbling of Volcanoes and Earthquakes Around Earth that are Waking Up at a Alarming Rate.
    Just as they did in 1883 from Krakatoa.

    LEADERS PLANT TREES WHILE YOU STILL CAN.

    Read well and study on your own after you have read this.

    This is not a game or joke our Sun gives off a Solar Wind all day year round. If you live in the State of Alaska you see it in the
    sky above what a sight it is going through our Earth’s Magnet Polls of the North and the South, North Poll. It’s called the
    Northern Lights or the Aurora Borealis. The day will come when you will be able to see it all over Earth as in the year 1859 Solar Flare,
    It was the largest in 500 years. Two Astronomer’s Hodgson and Carrington told the World that the Solar Flare made a Geomagnetic
    Storm reach Earth in hours not days. Back then it gave new meaning to “Reach For The Skies” from Telegraph Operators.
    For hours sparks flew from the key board. Even after the Batteries were disconnected. Nov 3 and 4, 2003 had a X40+ Class Solar Flare,
    Thank GOD it was not coming at Earth this time.

    Our Sun’s UV Rays will get stronger as each passing day goes by, read and i will tell you why. The Great big FOREST have be stripped
    from most of the Earth for Greed of Money by the Wicked. The trees our are Main Source of Oxygen on this Plant. The Forest Trees scrubs
    the Pollution out of the air and makes Oxygen from the rain and dirt that it grows in. The Forest Trees do more than just make Oxygen
    they stop Soil Erosion, just Look at the 1930 Dust Bowl. Greed by our wicked Government leaders to bleed from us as much money as they
    could out of us thru taxes led farmers to clear cut all their Forest, and farm all the land they were being Tax on.
    They had to farm it to pay for the Taxes. Why leave the Trees when food crop makes Money.

    This Did not Help the Depression that effected most all Worldwide. More than 100 million in the coming years will suffer from Malnutrition
    and Dehydration. Going without Food and Safe Drinking Water to drink many will die!

    One country can see clearly and knows already the World’s food and safe drinking water supply is running out at a record pace. With one of
    the world’s largest Population it has taking steps to no longer let anyone in its country, export any of its farmland grown food or grain
    from INDIA to any other country Nov 2013.

    China is trying to buy up all the world’s grain it can and the future harvest of framers. Future Commodities of Food Stocks soon will climb
    like a rocket because of this. China is also right now working on passing laws on its farmers. China Rural Reforms On Farming Jan 2014.

    It to soon will become a country that will not export any of its food or grain to any other country. In the United States of America alone
    more than 46+ Million Americans Received Food Stamps and that number is going up every day every year since 2009.
    The number of Homeless is growing worldwide in America 20,000 in the once known to the world as
    “Motor City” Detroit Michigan.

    The bread and food lines are growing Worldwide. 100 to 300 in Sioux Falls S.D. Every Friday stand in the cold waiting to get food at the
    Military Armory. The same once a month in Hawaii in front of a Stone that dwarfs any man that reads…….

    (“IN MEMORY OF WAIALU – KAHUKU WORLD WAR II HEROES WHO GAVE THEIR LIVES THAT THE REST OF THE WORLD MAY LIVE IN PEACE”)
    it list the names of many

    (“DEDICATED BY THE WAIALUA LIONS CLUB JULY 4, 1947”)

    Through the years many of us have help cook and feed the poor and needy in Hawaii and around the World, most of us USA Military or work or
    did work or Volunteered for Uncle Sam.

    And GOD willing may we be able to do so till our LORD returns.

    The Pollution and CO2 Carbon Dioxide go into the Tree Bark as a shield from most bugs so they do not eat the tree. Less Forest less Oxygen this
    is why the Moon. That has no Oxygen is very cold on the side without Sun Light, And hot as ever on the side with Sun Light. Way too cold and too
    hot to live there. You would need at least 10 times the Energy we use on Earth to even live there and life on the Moon would be very short.

    With no blank of Oxygen to lessen or reduce the Sun’s UV Rays and Solar Wind they are deadly there on our Moon. Every Mt. Climber and
    Aircraft Pilot knows the higher you go the thinner the Oxygen and colder it gets.
    Just spend a night on a Mt. top above 13,000 feet with no Sun Light and you will see or should i say feel the cold stinging any of your
    exposed skin. If you are new to Mt. Climbing stay below 10,000Ft. The Astronauts and the Cosmonauts and Fighter Pilots that i have been
    with for years know this very well, and the Radiation Hazards to humans at High Altitudes.

    Soon the Sun’s Solar Wind and UV rays will be way to strong for most to go out in the Sun Light for even a short time.

    The Geomagnetic Storm to come and the Bad Weather Storms well you have not seen nothing yet and the Sea Level is Rising the Oceans.
    Many Millions have been affected by Floods in China and Pakistan and around the planet.
    Every year there is more storms and they are stronger of greater magnitude and bigger.

    In 2005 Over a Thousand dead in New Orleans Flood, and the list is going on.
    Homes without Electric power are in the hundreds to 1,000 all over earth every year now from storms.
    Pray you are ready to be without power for a week or two in the cold winter or hot summer.

    GREENLAND Ice sheet took more than 3,000 years to get its mass size and weight.
    Greenland’Ice sheet is one of the largest ice sheets on this Planet Earth it is the second in mass. People on Earth are putting an end to it in
    less than 50 years.

    There is a very simple point to this. Dams all over the planet have had
    a Earthquake when filled too fast or let out a lot of water in a short time.

    GREENLAND Ice sheet Weight is a unbelievable amount as it gets lighter,
    GREENLAND ICE sheet WILL give a Earthquake no one will forget.
    Coastal cities LOOK OUT a Mt. Wall Of Water will come, from one of these Earthquakes. KJV Rev 6:12
    If you live by the coastline now is a good and smart time to move you might not get another chance to do so in time. History has recorded times of coastal
    towns, cities and coastline being inundated by sea water 5 to 10 miles inland.

    In the past 50 years Earth has had more FLOODING then in the last 1,000 years. 1014AD VERY LARGE TIDAL WAVES THE LARGEST EVER RECORDED FROM IMPACTS,
    ALL OF THE ATLANTIC OCEAN AFTER PASSING THROUGH COMET’S LONG TAIL.
    LEVELING WHOLE CITIES AND TOWN THAT WERE MILES INLAND.

    And there shall be Famines, and Pestilences, and Earthquakes, in divers places such as was not from the beginning of the Creation.

    Scientist Dr. Katharine Giles had done many experiments investigating “Sea Ice Thickness”, and showed it to governments around the Earth how the
    Sun rays and winds affected the newly exposed Arctic Ocean. Some of Scientist Dr. Giles research focused on using satellites to better understand
    the physics of the ice covered Polar Oceans.

    Scientist Dr. Giles to all Warning Water will warm faster than ICE covered water or water with ice in it.

    The last 30 years On Earth we have broke all High Temp Records and the temp it is still going up.

    All the Worlds Ice Glacier are melting at an Accelerating Rate. The Glaciers and Polar Ice Caps store more water than all the Fresh Water Lakes on Earth.
    Look to the (US Gov web site “USGS U.S. Geological Survey” Repeat Photography of Alaskan Glaciers USGS)

    The Bad Weather Storms now are Babies compared to what is to come.

    They will get even bigger and worse less Oxygen the more UV Rays to the Earth and more Water molecules will evaporate and go up into the Earth’s
    Atmosphere. Less Oxygen the Colder without sun light and Hotter with it.
    Record cold and record hot temps, highs and lows will now be broke every year.

    The Sky full of more water vapor molecules, more snow in the winter and more Flash Floods in the Summer. All earth will see way more fires and the
    Deserts are growing larger and have been for the last 75+ years.
    The water Springs in the desert that once made the place a oasis to support life are long gone.

    Satan’s Sin City “Las Vegas” very soon to die like a fish out of water.

    The Governor of California Jerry Brown has declared a State Of Emergency due to the driest DROUGHT in California’s history. Friday January 17, 2014

    Lake Mead at record low and soon will not be able to make electric power.
    UK most rain in 300 years Flooding February 2014.
    Middle East dryest in 1,000 years 2009 – 2014
    (” If every living person on Earth were to Plant A Tree Today we might have a chance.”)

    FOR A SHORT TIME ALL THE MILITARY ON ALL SIDES PUT DOWN THEIR WEAPONS AND PLANTED TREES
    IN PAKISTAN MORE THEN A MILLION TREES IN A DAY, and they did this for days.

    NOW WHY CAN WE NOT DO THIS WORLD WIDE?

    Maybe the UN and leaders on this planet are just a little more than show in the head.
    OUR Planets Atmosphere needs Oxygen with the decline of it the world’s health will decline, as like some of the not so smart gov payed Scientist.
    Some that will do or say anything for $$$$$.

    Once the days start getting shorter the cooler it will get and longer days warmer, most all fifth graders and every framer on Earth knows this.
    IF they had know better and had a brain like a Scientist to go with the tidal of one they carry they would have known, that the Sea Ice is going
    to grow at a Record Pace with Shorter Days. Just as with longer days the summers are going to brake all records each and every year that OUR
    Planets Atmosphere Oxygen declines.

    Mid Summer Days hot as Hell, Winter Nights POLAR BEAR WEATHER. Stronger winds wind chills -0 and below the new normal for winter.

    (“EXPEDITIONS on ships into ice seas many have been done most all know it is safer and wiser to do it as the days are getting longer not as a
    fool when the days are getting shorter. You risk yours and the life’s of others that will come to rescue you.

    World Leaders and your Scientist be Smart open your eyes most all on Earth can see and want to hear the TRUTH from its leaders.
    Stop running your vessel Afoul. If you follow a true course the spirit that gives your heart its life will give you great wisdom and strength
    and power to resist the wicked.”)

    Scientist are you afraid of losing that fat pay check, or think that the wicked will end your work like NOBLE BRAVEHEARTED Scientist Dr. Katharine Giles.
    Everyone that the wicked think they have stopped its work 100 will replace that NOBLE BRAVEHEARTED one.

    By your work shall ye be judged do good help others and always seek and tell the TRUTH.
    Every soul will be filled with great fear that don’t help others and don’t seek the truth and our LORD, JUDGEMENT DAY.

    The Earth’s Atmosphere Blanket surrounding it protects life on Earth as Our Lord and GOD will all that seek Him.

    Then it is written WHEN THE TREE IS FULL IT IS HARVEST TIME. All the Earth will someday burn away.
    This is all Foretold in the Bible Read it
    and may our Lord Bless all that do so.
    Daniel 12 : 1 – 3

    The Lord’s Little Helper
    Paul Felix Schott
    [email protected]
    KI4-AEX

    P.S.
    2 Peter 3:10
    But the day of the Lord will come like a thief, in which the heavens will pass away with a roar and the elements will be destroyed with
    intense heat, and the Earth and its works will be burned up.

    GOD Bless You and Your Love ones
    Give thanks to our Lord Jesus Christ every day.
    Read
    Luke 21:20-22
    Matthew 24: 30-33

    Solar Energy the way to go.
    Many States and Countries Are and are Banning Fracking.

    SAFE DRINKING WATER RUNNING OUT FASTER THEN YOU THINK WORLD WIDE.

    Hydraulic Fracturing a Danger to us All.

    Archimedes and Albert Einstein
    These two are at the top of the list of the World’s Greatest Scientists,
    Viewed by Scientist around the World.

    Sad that for the last 25 years or so of every teacher asked no matter what
    Grade k through 16. At least 80% of them did not know Archimedes. Even sadder 90% of them could not tell you what one of the most
    Brilliant Scientist to ever live on Earth. Won the Nobel Prize for.

    It was for the work Albert Einstein did to show the World it could get
    Free Energy, Electric from the SUN. (THE PHOTOVOLTAIC EFFECT).
    We still do not Teach this to are young Why?

    Churches all over earth are Going Solar why not are schools?

    In many cities and more added every day there are more (EV’s) Electric Vehicles Charging Stations than gasoline, the UK was one of the first.
    Wicked Leaders and many that are in the Dark and Lost wake up it will very soon be too late.

    Please go to (Electric Vehicle Charging Station map) Oil CEO’s soon to lose more than their shirt.

    FREE SOLAR ENERGY FROM THE SUN. Why KEEP sending your TAX $$$$$ to the Middle East.

    Canada is next door obama and is one of our Closest Allies. Canada keystone pipeline in January 2012, President Obama put the brakes on and rejected
    the application. We should have done all we could, to have completed the project long ago.
    Sorry obama i forgot Canada did close the wicked Muslin Islamic Republic Den Of Spies And Espionage in Canada and told the Terrorist supporting
    people working in them to leave Canada in less than 5 days or go straight to jail.

    You obama are still trying to send Muslins all the USA tax money you can.

    SOLAR ENERGY
    Why is not every GOV BUILDING IN THE UNITED STATES OF AMERICA COVERED WITH USA BUILT “BUILT IN AMERICA” (PV) SOLAR ENERGY?

    WE WOULD BE SAVING MILLIONS AND PUTTING MILLIONS TO WORK.
    WHY ARE WE STILL SENDING $$$,$$$,$$$,$$$ TO THE Middle East ?
    When there is SOLAR and WIND ENERGY.

    Tesla car owners drive coast to coast FREE from the SUNLIGHT, 2014.

    This is not the Roman Empire (Taxes Kill Growth) Lower all taxes and America will grow and FLOURISH without OUR
    White House SATAN DICTATORSHIP AND CONTROL on US.

    There is enough Energy coming from our SUN to power all are needs on Earth and then some.
    Albert Einstein 1907

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