darren-nolander-small-house-featuredA new study by PwC and the Urban Land Institute is out, and the Emerging Trends in Real Estate for 2018 point to a penchant for smaller homes and secondary cities. Homebuyers and real estate investors are attracted to these less flashy outposts, the study notes, because they are relatively affordable and typically have a strong presence of young, skilled workers that contribute to a diverse, robust economy.

What this also means is that homebuilders are shifting gears. They’re turning their attention toward smaller urban cores, as well as the outlying suburbs of larger cities that are becoming highly competitive in terms of livability, employment offerings, and recreational and cultural amenities.


Millennials and Generation Z, which consists of those born after the mid-2000s, now comprises more than 150 million people who are and will be looking to purchase homes at a strong rate over the next few decades. Meanwhile, Baby Boomers are remaining in their homes longer, with fewer moves being made. When these moves do occur, they typically happen out of necessity, resulting in a Boomer moving in with their children or into an assisted-living facility, which presents little opportunity for the housing market.

With that in mind, attention and momentum remains on the younger generations. The study notes this has inspired homebuilders to craft more of what Millennials desire in a long-term living environment. This includes smaller homes like townhomes, condos and modest “starter” homes outfitted with energy-efficient features.

Demand among these generations is strongest in:

  1. Seattle
  2. Austin, Texas
  3. Salt Lake City
  4. Raleigh/Durham, N.C.
  5. Dallas/Ft. Worth, Texas
  6. Fort Lauderdale, Fla.
  7. Los Angeles
  8. San Jose, Calif.
  9. Nashville
  10. Boston


Even more good news is the fact that homebuilders are steadily back to work, something this industry has been striving for since the recession. Demand has outpaced supply, which shows a good deal of promise for the future. Still, most of the homebuilding executives who participated in this survey noted that most of the sales activity is taking place at more affordable price points, followed by those who want to modestly upgrade their living situation and then luxury sales.

Right now at least, it may pay to be the big fish in a small pond. This is also a key time to brush up on all the viable programs and products you can offer your clients that may provide some added relief and comfort as they wade through these big decisions. Widening your net can present many opportunities for growth, however. Think about it. While Prada and Chanel may only need to sell a few pieces of merchandise per day to pay their monthly rent, who are the biggest retailers in the world? Amazon. WalMart. Costco. These guys achieved world domination by offering convenience, timeliness and affordability. They’re happy to work harder and sell more, because they know their level of service and convenience will soon spread to the masses, resulting in more and more business.

The more deals you close, the more opportunities you have to provide a stellar experience – one your clients may be eager to pass on. One that can result in not only repeat business, but steady word-of-mouth business. So think small sometimes. Our homebuyers are. Take their lead and begin to develop an appreciation for smaller cities, smaller homes and smaller pricetags as the housing industries work together to ensure that future supply will fulfill the level of unmet demand.


Regional Vice President - Southwest

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