It’s been a tough few years, but real estate agents have reason to be optimistic.
Population growth and improved economic conditions—at least in certain areas of the country— mean the future of the real estate industry looks bright.
The market will be fueled by strong employment in the retail, office, and industrial sectors. Strong demand for apartments is anticipated, and housing construction is expected to be robust.
The following markets will almost certainly see expansion in 2013. This means that you, as a licensed real estate professional, will have the opportunity to do well if you happen to be in any of them.
San Francisco. California’s unemployment dipped below 10 percent in November for the first time in four years and continued to drop even lower in the Bay Area. Businesses are moving to the downtown area after a multi-year trend that took them to the suburbs. This renewed inner-city activity is bolstered by San Francisco’s excellent transit systems. Growth in the City by the Bay is driven by a healthy employment rate in high-tech sectors.
New York City. Hurricane Sandy’s devastation notwithstanding, the Big Apple is a good investment for 2013. Investors are wary of a run-up in prices, but growth is due to strong job prospects for New Yorkers in the burgeoning healthcare and education sectors, as well as in the service industry.
San Jose. As in previous years, San Jose is a market to watch because it’s a technology corridor to the broader Silicon Valley. More than 6,600 technology companies are based here, employing 225,000. And all those folks gotta live somewhere. Permits for single-family homes in San Jose rose from 830 to 1,284 from 2011 to 2012, a 55 percent jump. And a recent study by PricewaterhouseCoopers and the Urban Land Institute put San Jose third in the nation for development prospects and second in new home construction.
Austin. With a 2.3 percent population bump from the echo-boomer sector expected next year and a continuing trend of wooing investors, commercial real estate in Austin looks strong for 2013. Hotels and apartments are sprouting up all over the place, and office and industrial developments are following suit. Single-family home inventories are at historically low levels, and home prices have risen 2.9 percent from 2011 to 2012—the seventh-highest increase in major metropolitan areas in America.
Houston. Here’s another Texan success story, with strong employment in the energy sector driving real estate growth. During the housing boom, Houston was somewhat immune to the soaring prices and saturated market, so the city came through the bust relatively unscathed. An influx of 76,000 jobs in 2013 (a 2.8 percent year-over-year gain), coupled with Houston’s low inventory of available homes, means prices will increase.
Boston. Boston’s developing high technology and biomedical research industries are boosting employment prospects and, consequently, more investor interest in the area.
Seattle. Silicon Valley is well known for software development, but Seattle is another high tech epicenter. The city’s gross metropolitan product was $231 billion in 2010, making it the 12th largest metropolitan economy in the United States. Technology, Internet, and “green” companies continue to stream into Seattle, keeping its investment profile high.
Washington, D.C. Commercial real estate prices have appreciated in the nation’s capital since the real estate meltdown. Many industry observers now say D.C. investments are recession-proof.