Real Estate Journal — New Jersey — September 16 - 29, 2016 — 15B
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Announced by The Counselors of Real Estate (CRE) George Vallone shares insights on The CRE 2016-17 Top Ten Issues Affecting Real Estate J ERSEY CITY, NJ — George Vallone, CRE , is a co-founder of the Hoboken Brownstone
businesses. 5. The Political Environ- ment : The political environ- ment has become acrimonious at all levels – global, national, state, local – and affects in- vestment decisions (includ- ing business and household location decisions) with issues ranging from the perceived ability of governments to function to taxation to social issues. Social media makes it very easy to track the political and economic climate of any locale – and debate any politi- cal issue publicly. 6. Housing Affordability and Credit Constraints :
New issues are beginning to emerge in the housing mar- ket, as affordability and credit constraints are challenging both the rental and home ownership markets. Stringent credit requirements prevent many households from en- tering the home ownership market, increasing demand for rental property. Limited available for-sale inventory and income stagnation are affecting affordability. Multi- family development continues but rents are outstripping in- comes in many communities. With declining affordability, questions arise about where
almost tripled since 1980, and is expected to increase to more than 7.6 million over the next 40 years, according to the U.S. Census Bureau. Older house- holds and younger households are competing for housing in many of the same places. 4. Densification/Urban- ization : Transportation op- tions, walkability, extensive work/live/play options con- tinue to draw people of all ages into the urban core and to close-in “urbanized” areas. The move to higher density areas continues, as job growth and dynamic urban centers attract new residents and
newly formed households will live, where the workforce will reside and whether affordable services will be available for aging Baby Boomers. 7. The DisappearingMid- dle Class : The wealth and income gap continues, with a number of measures showing stagnant or declining wages and wealth. A recent Pew Research study shows that the median income for middle- class households fell by nearly 5% between 2000 and 2014. Their median wealth (assets minus debt) declined by 28% after the housing market continued on page 18B
Company (HB Co) . Vallone shared insights about the most crucial issues impacting U.S. commercial and residen- tial real estate. He is a mem- ber of The Counselors of Real Estate (CRE), the global pro- fessional association which annually announces The Top Ten Issues Affecting Real Es- tate, an analysis of the most significant business trends and conditions which identify and rank real estate opportu- nities and risks. Members of CRE are highly experienced property experts who provide specialized and objective advi- sory services to clients. “Uncertainty within the global economy, tightening commercial and residential real estate credit, and the large numbers of both aging baby boomers and young mil- lennials simultaneously in the marketplace will have the greatest impact on real estate over the next 12 months,” said Vallone. The CRE 2016-17 Top Ten issues Affecting Real Estate include: 1. The Changing Global Economy : The IMF has re- vised GDP growth downward for much of the globe in 2016- 17, as economic uncertain- ties continue and intensify. Currency issues, declining exports, and soft energy prices add to volatility. Political is- sues and conflict undermine stability as well. 2. Debt Capital Market Retrenchment : Debt mar- kets for commercial real es- tate are slowing sharply. Regulators are telling bank lenders to curtail CRE lend- ing (that’s 50% of the debt market), and the CMBS mar- kets are slowing down, with no legislative fixes to reten- tion rules that are due to go into effect in the summer of 2016. Many insurance compa- nies that traditionally invest in real estate are approaching their real estate allocation limits. 3. Demographic Shifts : Millennials have overtaken the baby boomers in sheer numbers, but both groups remain substantial real estate consumers. While the boom- ers are retiring at a rate of ap- proximately 10,000 per day, America's population of per- sons aged 90-and-older has
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