Rising numbers of female executives, affluent immigrants, younger and older workers, and retirees will have a huge influence on community building in the United States over the next 10 years, according to a new Urban Land Institute report, Demographic Strategies for Real Estate by John Burns Real Estate Consulting LLC.
Being able to accurately predict how and where people will want to live and work in upcoming years is critical real estate investing success. The report states, “actionable intelligence on the ways American society is evolving is critical for real estate decision makers in all areas of the business.” Demographic trends will affect real estate investment and development through the next 10 years and are what real estate investors need to be keeping an eye on.
According to the report, these demographic drivers present beneficial opportunities for real estate professionals:
- The continued rise of working women — Women now earn 58 percent of all college degrees in the country, and 38 percent of the time earn more than their spouses. By 2025, the number of women in the workforce will rise to 78 million, 8 million above the level in 2015.
- A rising number of affluent immigrants — Immigration will account for more than half the U.S. population growth by 2025, assuming current trends continue. Contrary to some perceptions, many immigrants coming to the U.S. are highly educated middle- and upper-class families with substantial purchasing power.
- The graying of America — By 2025, 66 million Americans will be over age 65, which is 38 percent more than in 2015. This will create lucrative opportunities for customer segmentation, given the widely varied needs and lifestyles of younger retirees versus older ones. The outpouring of retirees also will create more opportunities for workers, increasing incomes for many occupations.
- Young adults driving household formation — 44 million 18- to 27-year-olds born in the 1990s will lead the majority of new household growth over the next decade, despite forming households more slowly than their predecessors. They are expected to create 14 million households by 2025.
In terms of land use and development, the report predicts the suburbs will draw about 79 percent of the coming wave of new households, despite the continued revival of urban downtowns, as younger individuals seek more communities that combine the best of urban and suburban living. Many will choose to rent rather than own homes, pushing up demand for single-family rentals in particular.
The views, statements and opinions expressed in this article are those of the author and are not necessarily those of Institutional Real Estate, Inc.
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Jody Barhanovich is a reporter with Institutional Real Estate, Inc.
