Counselors of Real Estate identify top 10 issues affecting real estate

The Counselors of Real Estate membership collaborated to formulate the Top Ten Issues Affecting Real Estate for 2018-19, which consists of issues and trends most likely to affect commercial and residential real estate.

This year’s list goes a step further and differentiates between current and longer-term impacts on real property.

Members of the counselors organization are recognized property experts who provide specialized and objective real estate advisory services to clients.

Near-term issues identified are:

1. Interest rates and the economy: For years, the market has anticipated rising interest rates. With the Federal Reserve now nudging rates upward, the commercial and residential real estate markets are experiencing decreasing demand for commercial property and higher home mortgage rates. Rate increases also limit value appreciation for commercial real estate and impact housing affordability.

2. Politics and political uncertainty: Tax reform and policies enacted to change the balance of trade with other countries impact jobs, incomes and property of all types, both commercial and residential.

3. Housing affordability: The U.S. has had general underproduction of housing for almost two decades. Since 1999, the net underproduction of housing has been nearly 2 million units. Income stagnation across nearly every income bracket, with the exception of highest income households, has hampered access to affordable homes.

4. Generational/demographic change: For the first time in more than half a century, there are four distinct groups exerting influence on both commercial and residential real estate: aging Baby Boomers, a similar number of Millennials and the smaller groups on either side of Millennials (Generation X, now mostly middle-aged and Generation Y, including students and those in their early 20s). The direct real estate impact is already being seen in the changes in work processes, space utilization and where companies choose to locate. There are similarities between the wants and needs of the generations, but ultimately the difference is in timing.

5. E-commerce and logistics: The growing practice of online shopping is affecting the retail sector as the consumer demands convenience, selection and fast delivery times and in turn is also impacting warehousing and infrastructure with increased demand. Ecommerce has been a major boon for warehouse/distribution properties as there is a huge demand for storage space for that “last mile,” ensuring the fulfillment of the demand for one- or twoday delivery promises.

Longer-term issues identified are:

1. Infrastructure: Due to inattention to physical infrastructure, roads, bridges, airports, water and sewer lines, electricity and even public transit, all necessary to sustain and expand cities and communities, are rapidly deteriorating. U.S. infrastructure was given a D+ rating in the American Society of Civil Engineers 2017 Infrastructure Report Card. As much as $4.5 trillion is estimated by that organization to improve critical infrastructure by 2025. These infrastructure issues have a direct impact on economic productivity, as well as existing real estate properties and new developments, as they depend upon reliable and well-maintained infrastructure.

2. Disruptive technology: The real estate industry, like the rest of the world, is poised to adopt new technologies — advanced robotic manufacturing and warehousing, driverless cars and trucks, the extensive availability and utilization of personal and transactional data (which enhances all kinds of business decisions), “smart” building technology that enables efficiency, global connectivity, automated business processes and information protection through cybersecurity. Homes, offices, warehouses, hotels, multi-family properties and every facet of real estate is enhanced by adopting ever-improving technology.

3. Natural disasters and climate change: The impact of climate change and natural disasters on real estate is perceived to be increasing over time and result in property and environmental damage from events such as severe storms, wildfires, floods, earthquakes, volcanic activity and rising sea levels. Communities are responding with initiatives that are intended to mitigate the effects of disasters, and municipalities and real estate developers must navigate a myriad of state and local energy and sustainability regulations.

4. Immigration: If reduced by law, this will have a negative impact on new housing starts and home purchases. When combined with the current skilled labor shortage in the U.S., there will be a fundamental growth dilemma facing the U.S.

5. Energy and water: Natural resources are important to property and quality of life, yet are threatened by not only environmental damage but also entangling state and local regulations, which complicate the development process.

Berkshire Hathaway welcomes sales associates

Sue Walsh and Patrick Gallagher, sales leaders of Berkshire Hathaway HomeServices Fox & Roach, Realtors Chestnut Hill office, welcome Alea Copeland as a sales associate.

“I joined BHHS Fox & Roach because of their commitment to educating their staff and their dedication to improving their surrounding communities,” Copeland said.

Formerly with Weichert Realtors, Copeland has been licensed since 2009. An active participant in her community, she is a member of Montgomery County Association of Realtors. Copeland resides in Philadelphia and serves Philadelphia and Montgomery counties.

Anne Tulloch, sales leader of Berkshire Hathaway HomeServices Fox & Roach, Realtors Spring House Home Marketing Center, welcomes Helene Duchaussoy as a sales associate.

“I joined BHHS Fox & Roach because of their reputation,” Duchaussoy said.

Formerly with Re/Max Action, Duchaussoy has been licensed since 2005. She resides in Lansdale and serves Montgomery and Delaware counties.

Laura Selverian, sales leader of Berkshire Hathaway HomeServices Fox & Roach, Realtors Collegeville office, welcomes Michael T. Fleming as a sales associate.

“I joined BHHS Fox & Roach because they value their agents and employees,” Flemming said.

An active member of his community, Fleming resides in Gilbertsville with his two children. He serves Montgomery County.