According to PWC’s 2015 U.S. CEO Survey, CEO’s believe more opportunities exist today for their companies than was the case three short years ago. The survey also suggests that CEOs outside the U.S. are looking to the U.S. more than any other market for their growth in 2015.
What are those CEOs – domestic and international – seeing? Let’s take a look at some of the trends that we expect to shape the 2015 investment year.
Urbanization is a trend affecting everything from housing (condos, anyone?) to public infrastructure. If you’re 40 or over you likely remember that cities used to be places that buzzed with life from 9 to 5 and then quieted down as all the workers slipped back to their bedroom communities for dinner with the family. Today, more of those workers live within walking distance of their workplaces, and voila, we’re seeing the transformation of downtown cores with investments in retail, dining, housing and urban cores that suddenly boast high quality of life well past 5pm.
Mover Over Boomers, Here Come the Millennial
Boomers will still have a significant impact on investments and real estate development for about twenty years, but there’s a new cohort about to take over the lead demographic role in economic definition. As baby boomers die off, the millennial cohort is poised to become the largest living demographic cohort. This is the group, aged 18 to 34 in 2015, which will shape the economy the most in the next 20 – 40 years. Less affluent than their boomer parents, millennial will rent longer, postpone homeownership, and thus affect the real estate and development industries.
Technological disruptions - Uber, crowdfunding and e-commerce are all examples – are increasingly viewed as an “adaptation challenge” and much less an “event” to be feared. New business environments and tools create and respond to new user demand as technology continues to push for changes in, among other things, real estate locations and usage of space.
Event Risk the New Normal
Geopolitical risks, natural disasters and global unrest are on the minds of most domestic investors, and as such, according to PwC, international investors (those international CEOs we referenced above) will likely be key to 2015 investment volume.
Housing Back to “Supply and Demand” Fundamentals
It appears the bubble and collapse are truly in the rearview mirror of the residential real estate industry, and consumer confidence in this sector is on the rise.
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