Growth is good. And with growth comes new construction. But as growth increases, some of the opportunities for building new properties diminish because there is less space on which to build. In that situation, you need a new kind of growth – the expansion of the area where you can build. But often times, especially today when more and more people are moving back into city centers for quality of life issues and increased employment opportunities, expanding the area in which you can build doesn’t necessarily solve the problem of the need for new construction.
The bottom line is that there are myriad forces at work when it comes to where, when and how developers choose to build. The real estate market has rebounded since the bust, but as you’ll read in our Fall New Construction package, it’s not so simple to say that the market is on the upswing. The cost of land, the changing face of financing, Millennials’ student debt, the need for affordable housing and many other issues factor into the mix. So while many aspects of the new construction market look bright, some vexing problems could cloud its future.