The Next Cultural Shift In Real Estate
Our entire culture of Gen X and Millennials has been bred to love city living. From the moment we graduate high school and head to college the shift towards city living has begun. As college has grown more a part of the American culture so has city living. Its because it is all about convenience, in college you have to sleep in a dorm which is practice for an apartment building. You are usually within a college town where everything is right within walking distance such as groceries, restaurants, work and nightlife. This type of living combined with the increase in technological advances making everything about our lives convenient drove our culture straight towards cities. So what's next for our culture? What comes next is as technology further streamlines our lives and makes things more affordable and convenient it will do the same with real estate.
With this cultural shift towards cities and the decrease in crime that occurred in major areas like New York City, Miami, LA came not only the demand but the desire to live in these places. Our culture suddenly went from a mansion culture to a Penthouse culture seemingly overnight. The apartment living offered you more convenience by decreasing the maintenance time you needed to commit to a house, security, someone to help you in a doorman and no time wasting in traveling because you could walk to live your life. Within cities you had everything you needed such as the work and nightlife balance our college culture ingrained in us. This success brought about rapid price surges as in any city there is no way to handle all this increased demand besides building up which is expensive. This created excessive pricing for apartments.
All of sudden cities became over crowded with not only locals but tourists as the cities became safer this drove up people who wanted to experience them. This had a secondary effect which triggered price increases in everything from groceries to that cocktail at the bar. All of a sudden the food and drinks became expensive in areas where people used to be afraid to walk down the street as restaurants ran to places with more affordable rent. In places like New York City this helped create Brooklyn which spent years marketing itself through celebrities, music and movies and culminated in great success and pricing that rivals that of Manhattan.
What's next is people will look for further convenience in terms of time and lifestyle. The coming shift with self driving cars, A.I. and Virtual Reality is offering this. It is making cities no longer convenient for people. This will do the same as past technological advances did to cities such as highways its just a new way of looking at it with a new generation. The urban suburban trend will be the next way of living for people. Having all the conveniences of a city in towns all over the country along with streamlining of "lost" time by solving this with self driving cars making it more convenient then walking. With virtual reality you will also have no need to go to an office you can have an office wherever it is most convenient.
People will always have the need to gather in places and the sense of urban will never die but the urban suburban will be the new culture. You will have the Penthouse with the affordability of the suburbs. Companies will also need to spend less and less on rent and have less need to spend money on high office rents, they can come to their employees.
This is not something that I would say happens over night, opening up a brand new office building two weeks from now in the suburbs will not generate the returns I am stating here. This is something that is ten years in the making. It will be a sudden switch when it happens though, the same as how we quickly went from a mansion culture to a penthouse culture. Our society is more mobile and moves more quickly due to technology and convenience. Sometimes it happens quicker the you think. This will lead to the new cultural shift in real estate.